Do you recommend any specific apps or methods for tracking the business vs personal usage? I tried just keeping notes but I'm terrible at staying consistent with it.

I actually keep it super simple. For my phone, I use the call log that's already on my phone and just highlight business calls once a week (takes 5 minutes). Then quarterly, I calculate the percentage. No special app needed. For internet and other utilities, I use the square footage method since it's much simpler and well-accepted by the IRS. Just calculate what percentage of your home is exclusively used for business, and apply that percentage to your utilities. Take photos of your office space and keep documentation of the square footage calculations. The key is consistency - whatever method you choose, stick with it and document your calculations.

Seconding this! QBO has saved me countless headaches with my S Corp. The payroll integration is worth every penny for handling the salary requirements properly. Just make sure you set up the chart of accounts correctly from day one.

Omg that sounds awful! Did you have to pay any penalties for having two plans? How did you even figure out you had duplicate plans?

I only realized I had two plans when I saw double payments coming out of my account! I called the IRS (waited forever) and they explained what happened. Fortunately, they waived penalties since it was clearly a misunderstanding, but they counted the extra payment toward my principal. The most frustrating part was that it took almost 3 months to get everything straightened out. The IRS had to manually cancel one of the plans and recalculate everything. Definitely check first before creating a new plan!

I've used both TurboTax and H&R Block over the years. In my experience, H&R Block actually shows the payment plan details in your account after filing, which TurboTax doesn't seem to do. The downside is that H&R Block's interface is clunkier overall. But for payment plan visibility, they're definitely better.

Thanks for bringing this up! Do you know what the income limits are for Roth IRA contributions? Also, for the SEP IRA, can I contribute to that even if I have a 401k through my main employer?

For 2025, you can fully contribute to a Roth IRA if your modified adjusted gross income is less than $146,000 (single) or $230,000 (married filing jointly). The contribution limit phases out above those amounts until it reaches zero. Yes, you absolutely can contribute to a SEP IRA even if you have a 401k through your employer. The SEP IRA contribution is based only on your self-employment income. The limit is 25% of your net self-employment earnings, up to $69,000 for 2025. It's a great way to reduce taxes on your freelance income while saving for retirement.

HSAs are awesome! Triple tax advantage is right - money goes in tax-free, grows tax-free, and comes out tax-free for medical expenses. For 2025, you can contribute up to $4,150 for individual coverage or $8,300 for family coverage. But you need a qualifying high-deductible health plan to be eligible. Check if your plan is HSA-eligible - the deductible needs to be at least $1,500 for individuals or $3,000 for families.

Should OP also mention that they paid the 10% early withdrawal penalty on the earnings? Seems like that might be another point in their favor showing they were following the rules correctly.

Yes, absolutely mention the 10% penalty payment! That's a great point. The fact that you correctly calculated and paid the 10% penalty on just the earnings portion demonstrates you understood and followed the rules. Actually, this detail is very important because it shows you were aware of the tax treatment difference between the returned contributions (not taxable) and the earnings (taxable with penalty). It helps establish that your reporting wasn't an oversight but a deliberate application of the correct tax rules.

Yes! My tax preparer told me the IRS is relying more heavily on automated systems due to staffing shortages. Apparently their computers just match documents like 1099s to what's on your return, and if there's any discrepancy, they automatically generate a CP2000 without anyone checking if there might be a valid explanation. It's frustrating because then the burden is on us to explain situations like OP's that are actually completely legitimate.

That's super helpful! I just checked, and Article 22 does mention something about a "two-year period" for researchers. Could that be related to why I'm only getting the 1042-S in my second year? I'll definitely ask about this specifically.

Yes, that's exactly it! Article 22 of the US-India tax treaty allows for tax exemption on income received for teaching or research, but there are specific timing provisions. The exemption typically applies for a period not exceeding two years from the date of your first arrival. What likely happened is that your university initially treated all your income as taxable in the first year, but in your second year, they realized you qualified for the treaty benefit and are now properly splitting your income between fully taxable wages (W-2) and treaty-exempt income (1042-S). This is actually good news, as it likely means a portion of your income will be exempt from US taxation. But it does make your tax filing more complex since you'll need to properly report both the W-2 and 1042-S on your tax return.

I've used both Sprintax and GlacierTax for my international student returns. Glacier tends to be a bit cheaper and handles 1042-S forms well. Many universities even have partnerships with them to give students/scholars discounts.