Thank you for mentioning this! My home country does have a tax treaty with the US. Is it too late to claim any treaty benefits since the payment and withholding already happened? Or can I still somehow claim the treaty benefit when filing my 1040-NR?

It's not too late! You can still claim treaty benefits when you file your tax return, even if the full 30% was already withheld. You'll need to fill out Form 8833 (Treaty-Based Return Position Disclosure) and attach it to your 1040-NR. On the form, you'll need to cite the specific tax treaty article that applies to your situation and explain why your moving expense reimbursement qualifies for reduced taxation under the treaty. The excess withholding will be refunded to you after your return is processed. Just be sure to keep a copy of your 1042-S and any supporting documentation showing the nature of the payment.

Which tax software would you recommend for nonresident aliens with 1042-S income? I tried FreeTaxUSA but it doesn't seem to support 1040-NR at all.

I found Sprintax to be the best option for nonresident alien returns with 1042-S forms. It's specifically designed for international students and scholars, so it understands all the income codes and treaty provisions. H&R Block's online version also works reasonably well if your situation isn't too complex. TaxAct supports 1040-NR but struggles with some of the more unusual income codes. TurboTax can work but requires more manual adjustments and verification. FreeTaxUSA unfortunately doesn't support 1040-NR at all, as you discovered. Whatever software you choose, I still recommend having someone knowledgeable review the final return before filing, especially if significant tax treaty benefits are involved.

If we go with partnership taxation, do my dad and I need to split everything 50/50 or can we have different percentages? Also, do we need to pay ourselves a salary or can we just take draws?

You can absolutely have different ownership percentages - it doesn't have to be 50/50. Your LLC operating agreement should specify the ownership percentages, and your K-1 forms will reflect those percentages for distributing profits and losses. For a partnership, you don't technically take "salaries" - you take draws, which aren't subject to withholding. However, you'll still pay self-employment taxes on your share of the profits regardless of whether you take draws or leave the money in the business. That's different from S-corps where you'd need to pay yourself a reasonable salary subject to payroll taxes.

For a new LLC filing as a partnership, you'll need to include Form 1065 Schedule B and check the box indicating it's an "initial return." You'll also need to select your tax year (usually calendar year for most small businesses). Make sure you've obtained an EIN before filing - you can't use your SSN for a partnership return.

Don't waste your money on H&R Block for a simple return. The people at those physical locations often just input your info into the same software you could use yourself for free. I made that mistake my first year - paid like $150 for something I could've done myself in 30 minutes.

Wow, that's really good to know! Do I need to file those previous years separately or can I do it all at once with this year's taxes?

You need to file each year separately. For previous years, you'll need to use the tax forms specific to those years - you can't use 2024 forms to file for 2022 or 2023. You can find previous year forms on the IRS website, and most tax software can handle prior year returns (though they might charge for this service). Start with the most recent unfiled year and work backward. The good news is that if you're owed refunds, there's generally no penalty for filing late. You're just losing out on money that was already yours!

Does this apply to off-campus apartments too? My daughter lives in an apartment near campus, not in dorms. Can we still count her rent as a qualified expense for her 529 distribution?

Yes, off-campus housing can qualify, but there's an important limitation: the amount can't exceed the room and board allowance included in the school's official cost of attendance figure for federal financial aid purposes. You'll need to contact the financial aid office to get this official figure. As long as your daughter's off-campus rent doesn't exceed that amount, it can count as a qualified education expense for 529 purposes. Just make sure to document everything in case of an audit.

That's interesting and scary. So if the 529 is in my name but my parents are claiming me as a dependent, does that mean NOBODY gets to claim the education expenses paid from the 529? Or do I need to claim the education credits even though I'm a dependent?

The person who claims you as a dependent (your parents) can claim education credits for expenses THEY paid - but not for expenses paid from YOUR 529 plan. The 529 distribution itself isn't taxable if used for qualified expenses, but those same expenses can't then be used to claim education credits. Your parents can still claim education credits for any additional qualified education expenses they paid out of pocket beyond what was covered by the 529 plan. This is why it's so important to keep careful records of who paid what. Many families mistakenly double-dip and claim education credits on expenses that were already paid tax-free from a 529 plan.

This makes a lot of sense. I think I've been expecting mind-reading. Do you have a standard list of questions you ask a CPA before hiring them? I'm wondering if I should be looking for a specialist given my situation with businesses in multiple states.

When interviewing CPAs, I ask about their experience with multi-state taxation specifically, including which states they regularly file returns for. I also ask if they have experience with the specific business structures I use (LLCs, S-Corps, etc.) across different states. I've found that larger regional firms often have better resources for multi-state taxation than solo practitioners, though they can be more expensive. If you have significant business across multiple states, it might be worth the investment. Some CPAs also partner with state-specific experts for jurisdictions they're less familiar with, which can be a good compromise approach.

So what's the solution then? Should small business owners just accept that we're probably missing filing requirements, or do we need to hire one of the Big 4 accounting firms to avoid problems?