I haven't checked that! My home country is Malaysia - would that make a difference even if I'm determined to be a nonresident alien? And how do I find out what the specific treaty provisions are?

Yes, tax treaties can definitely make a difference! Malaysia does have a tax treaty with the US, and it can affect how certain types of income are taxed even as a nonresident. The IRS has Publication 901 (US Tax Treaties) that summarizes the provisions, but they're not always easy to understand. The treaty might give you special treatment for scholarships, fellowships, or certain types of income. You can find the basics on the IRS website, but the actual treaty text is more detailed. When you file your taxes, you'd need to fill out Form 8833 to claim any treaty benefits.

I used Sprintax last year as an F-1 student and it was pretty good. It's specifically designed for nonresident aliens so it asks all the right questions about visa type, entry dates, and tax treaties. It's a bit pricey compared to some other options but the peace of mind was worth it for me.

Do you think it's worth paying the extra for TurboTax if it finds extra deductions? I'm on the fence about which to use this year.

Not necessarily. If TurboTax is showing a bigger refund, it's not always because it's finding legitimate extra deductions - it could be calculating something incorrectly. I've found FreeTaxUSA to be more accurate overall, especially for state taxes. Remember that paying more for tax software doesn't guarantee a bigger refund. It's about which software correctly applies the tax laws to your specific situation. If your return is fairly straightforward, FreeTaxUSA will likely give you the right result at a much lower price point.

That's actually a really good point. I had the same issue with the Recovery Rebate Credit two years ago. TurboTax asked me to manually enter what stimulus payments I received while FreeTaxUSA pulled it automatically from IRS records.

Thanks for bringing this up! I did check with my parents and they're not claiming me anymore since I've been fully supporting myself since graduation. But that's definitely something I wouldn't have thought about before reading your comment. How do you know whether someone can claim you as a dependent? Is there like an age cutoff or income limit?

There's actually a few tests the IRS uses. For a "qualifying child" dependent, you need to be under 19 (or under 24 if you're a student) and live with your parents for more than half the year. There's also a support test - if you provided more than half of your own financial support during the year, then your parents can't claim you, regardless of age or living situation. Since you mentioned you've been fully supporting yourself, you're definitely not a dependent anymore. It's definitely something that causes confusion that first year of independence! Glad you already sorted it out with your parents.

This is the best advice here. When I was a new grad, I missed out on the American Opportunity Credit my first year because I didn't realize I could claim it for my final semester. That was literally $1,500 down the drain! Also check if your state has additional credits. In California, I got a renter's credit that most of my friends didn't know about.

Thanks for this! I was in school for the spring semester before graduating in May, so I'll definitely look into the American Opportunity Credit. I had no idea there was a difference between credits and deductions until reading these comments. Do software programs like TurboTax automatically check for these credits, or do I need to specifically know to look for them? I'm worried about missing something important now.

Thanks for sharing your experience! That's really reassuring. Did you keep any documentation from Schwab about them refusing to change it, just in case?

I didn't keep any specific documentation from the call, but I did make notes for myself with the date/time and representative's name. I also downloaded and saved a copy of my 1099-R and 8606 in case I needed to reference them later. In retrospect, I probably should have asked for something in writing, but it all worked out fine. If you're really concerned, you could email Vanguard so you have a written response from them explaining why they used code 1.

Has anyone heard about any updates to this process with the new tax bill? I just did my first Backdoor Roth this year and I'm nervous about doing the paperwork right.

Do you know if this applies to independent contractors too? I had a client overpay me on a 1099 job, and I'm trying to figure out the best way to handle repaying them.

Yes, these claim of right provisions apply to independent contractors as well. The process is similar, but there are some differences since you received a 1099 instead of a W-2. For 1099 income, when you repay in a later year, you'll still use the same two options (deduction vs. credit), but the documentation is slightly different. Make sure you get a corrected 1099 from the client if possible, or at minimum a receipt documenting that you repaid the overpayment. This helps establish that you're not trying to double-dip by both keeping the money and claiming a tax benefit.

You're not paying taxes twice because you get to claim the tax portion back on your tax return. You repay the gross amount to the employer, then the IRS essentially "refunds" the tax portion to you when you file your return and claim it properly. It feels like paying twice in the moment, but it all balances out when you complete your taxes. The system is set up this way because your employer already reported the full amount to the IRS, and they need their books to match what they reported.