Thanks for this info! I just checked and Australia does have a tax treaty with the US. On my 1042-S form, it shows they withheld 5% - does that sound right for the Australia-US treaty? And would I need to do anything to get money back or is that the correct amount?

That 5% withholding rate sounds correct for Australia-US royalty payments (which is how AdSense income is typically classified). Since they've withheld at the correct treaty rate, you don't need to file anything with the IRS to get money back. Just make sure you claim this US tax paid as a foreign tax credit when you file your Australian taxes so you don't end up paying tax twice on the same income. Your Australian tax software or accountant should have a section where you can enter foreign taxes paid to get credit for them.

This is so true! Mine was incorrectly coded as 50 (corporate distributions) with 30% withholding when it should have been code 12 with 10% under my country's treaty. Took forever to get it fixed, but saved me hundreds.

This is super helpful! I don't think I'll meet the safe harbor since my income went up quite a bit in 2024 compared to 2023. How complicated is the Form 2210 to fill out? And what kind of documentation would I need to provide to show this was an unusual circumstance?

Form 2210 is admittedly one of the more complex IRS forms, but you only need to complete certain parts depending on your situation. For the waiver request, you'll fill out Part I, check box A for "Request a waiver," and attach a statement explaining the circumstances (the timing of your RSU vest vs. the sell-to-cover transaction). You don't necessarily need formal documentation upfront, but keep your RSU statements and any communications with your company about the transaction timing. The key is to clearly explain that this was a one-time timing issue outside your control - the vest occurred in one tax year but the withholding happened in the next tax year. If you're using tax software, it should walk you through the process. The penalty itself is usually fairly modest compared to the tax owed, so some people just pay it rather than going through the waiver process, but it's worth trying if the amount is significant.

Our company actually adjusted our year-end bonuses to help offset the tax impact when this happened. Worth asking your HR department if they're aware of the issue and if they have any programs to help employees caught in this situation. Some companies offer tax advance programs specifically for equity compensation.

Do you know if a 2-unit building would even be considered an "association" under those rules? And would choosing 1120-H vs 1041 affect how much we pay in taxes?

Yes, a 2-unit building can still qualify as an association under IRC 528 as long as it meets the other criteria. There's no minimum unit requirement in the tax code for this purpose. The IRS looks at how the entity operates rather than its size. Regarding taxes, Form 1120-H allows the association to exclude income from member dues completely, taxing only "nonexempt function income" like interest earnings or commercial rental income at a flat 30% rate. For small associations with minimal interest income, this often results in zero tax liability or a very small amount. Form 1041 trusts calculate taxes differently, potentially subjecting more income to taxation depending on how the trust is structured. For a simple pass-through arrangement like yours with minimal bank interest, the 1120-H is usually advantageous.

I switched to TurboTax Business for our condo trust and found their interview process much more straightforward. They have specific questions designed for small residential associations that made the whole process less confusing.

Did you do the dual status return yourself or hire someone? I'm worried my green card might be approved in the middle of this tax year and I hear dual status returns can't be e-filed.

I ended up hiring a tax professional for the dual-status year because it got pretty complicated. You're right that you can't e-file a dual-status return - it has to be paper filed. The preparer essentially had to prepare both a 1040NR for the part of the year I was a nonresident and portions of a 1040 for when I became a resident. If your case is simple (just W-2 income), you might be able to handle it yourself, but I had scholarships, some investments, and a side gig, so I didn't want to risk making mistakes. The peace of mind was worth the cost, especially since tax issues can potentially affect immigration cases.

This is super important! My university payroll department automatically started withholding FICA taxes when I told them about my green card APPLICATION (not approval), and it took months to fix. Is there a specific form to request a refund for incorrectly withheld FICA?

Yes, if your employer incorrectly withheld FICA taxes while you were still on an F-1 visa (and within your 5-year exemption period), you need to first try to get a refund from your employer. If they refuse or are unable to refund you, you'll need to file Form 843 "Claim for Refund and Request for Abatement" along with supporting documentation. Make sure to include a statement from your employer showing the amount of incorrectly withheld Social Security and Medicare taxes, a copy of your visa documentation, and a statement explaining why you're exempt. This is another area where Sprintax can help - they generally have guidance on completing these forms for international students.

It's a standard brokerage account, not retirement or anything special. She's owned it for about 12 years. The original investment was around $165k and it's grown to about $270k now. No special conditions other than she had to keep it for 10 years minimum per some agreement with the investment company.

Thanks for clarifying - that makes a huge difference! Since it's a standard brokerage account, she'll only pay capital gains tax on the growth portion (about $105k based on your numbers), not the entire $270k. If she's held it over 1 year (which she has at 12 years), she'll pay long-term capital gains rates, which are much lower than ordinary income tax rates - likely 15% for most people. Instead of withdrawing everything and then gifting cash, she could consider transferring shares directly to her children (in-kind transfer). This passes the tax obligation to the kids, who might be in lower tax brackets. They'd inherit her cost basis but could sell according to their own tax situations.

Good point. I ended up using both an advisor AND some tax software to model different scenarios when distributing my dad's investment account last year. The advisor cost me $400 but saved us about $8k in taxes by structuring the withdrawals properly.