The Donor Advised Fund sounds interesting! If I bunch several years of donations together, would that help me stay under the IRMAA threshold for multiple years, or just give me one good year and then potentially push me over in subsequent years? Also, do you know if medical premiums count toward that 7.5% threshold? I have some pretty hefty supplemental insurance costs.

Bunching donations can give you one year with a lower MAGI, which helps with IRMAA for just that determining year. You're right that you'd need to plan for the subsequent years too - that's where QCDs become helpful since they can reduce your taxable income each year without needing to itemize. Yes, your premiums for Medicare Part B, Part D, Medicare Advantage, and supplemental policies all count toward the 7.5% medical expense threshold! Many retirees don't realize this. Track all your out-of-pocket medical costs including dental, vision, hearing aids, and long-term care insurance premiums too. With the higher healthcare costs in retirement, you might be surprised how often you can clear that 7.5% threshold.

That's really interesting! How much did you have to invest to make it worthwhile from a tax perspective? I've been thinking about helping my son with his landscaping business but wasn't sure if it would make a meaningful impact on my taxes.

Pro tip: if you want less tax withheld from your bonus, increase your 401k contribution just for that paycheck if your company allows it. I put 50% of my bonus straight into 401k last year and it lowered my taxable income. Double win!

This is actually a really important point! My bonus pushed me into a higher tax bracket last year because it came in December. If it had come in January, my tax situation would have been completely different. Timing matters!

Is Publication 901 updated for 2024 yet? I checked a few weeks ago and they still had the 2023 version online. Also, do you know if non-residents can claim education credits like the American Opportunity Credit? I took some classes last year.

You're right that the official IRS website still has the 2023 version, but they don't typically update Publication 901 every year - only when treaty provisions change significantly. The 2023 version should still be applicable for most countries for your 2024 taxes. For education credits, non-resident aliens generally cannot claim the American Opportunity Credit. However, if you're from certain countries with specific education provisions in their tax treaties (like China, India, or several European countries), you might qualify for different education-related benefits. You'll need to check the specific article in your country's treaty that addresses students or education expenses.

Yes, you can e-file a 1040NR but not with every software. I used OLT.com (OnLine Taxes) last year and was able to e-file my non-resident return. Sprintax also supports e-filing for 1040NR. Most free options don't support it though.

What exactly is the carried interest loophole? I hear about it but don't really understand how it works or why it's such a big deal.

Carried interest is basically the share of profits that hedge fund and private equity managers get as compensation for managing investments. Instead of being taxed as ordinary income (which can be up to 37%), it's taxed at the capital gains rate (usually 20%). So imagine a fund manager who makes $10 million from managing other people's money. Instead of paying $3.7 million in taxes like other high-earning professionals would, they might only pay $2 million. That's a $1.7 million tax break just because of how their compensation is classified! Meanwhile teachers, doctors, and engineers all pay the higher ordinary income rates on their earnings.

That would totally screw over people in high cost of living areas though. $500k won't even buy you a 1 bedroom condo in San Francisco or NYC. Not everyone with a mortgage over $500k is wealthy - many are middle class families in expensive metro areas.

Do they really count retirement accounts? I thought those were protected. I have about $45k in my 401k but didn't think that would count against me for an OIC calculation.

Yes, they absolutely consider retirement accounts in your OIC calculation. While you're right that they can't directly seize most retirement accounts, they still view them as assets that could be used to pay your tax debt. The IRS typically includes a percentage of retirement account values in your "reasonable collection potential" calculation. They don't necessarily expect you to cash them out (especially given the penalties), but they do factor them into what they think you could potentially pay. This is one of the most common misunderstandings that leads to OIC rejections.

They apply any payments you've made toward your tax debt, they don't just keep the money. So if your offer gets rejected, that 20% payment (or whatever payments you've made) will reduce your overall tax debt. It's not lost money.