I handle payroll for a company that does relocation grossups and this is normal. Your W-2 will show the TOTAL - both the $15k you received plus the additional amount the company paid in taxes on your behalf. The full amount is taxable income. Check your last paystub of the year and look at the "YTD" column for federal withholding. It should be higher than normal because of the extra withholding for the relocation. If your company did the gross-up correctly, they would have withheld around 22% federal (supplimental rate) plus Medicare/SS taxes on the full grossed-up amount. If TurboTax is saying you owe more, it might be because your overall tax bracket is higher than 22% so you need to pay the difference.

As a newcomer to this community, I really appreciate all the detailed explanations here! I'm dealing with a similar situation where my employer offered a relocation package, but I haven't accepted the job yet. Reading through these comments, it sounds like the tax implications are pretty complex. For someone who hasn't gone through this before, would you recommend negotiating for the company to handle the relocation expenses directly with vendors instead of giving me a lump sum? Or does it not really matter since either way it ends up being taxable income? Also, are there any questions I should ask HR upfront to make sure I understand exactly how they calculate the gross-up and what will show up on my W-2? I'd rather avoid the confusion that several people here experienced!

Has anyone dealt with leaving a company but negotiating an extension on the exercise period? Most standard option agreements only give you 90 days after leaving to exercise, but I've heard some companies are flexible on this, especially when options are underwater.

One additional consideration that might help with your decision - if you're planning to leave the company anyway, you could potentially negotiate with your employer to extend the exercise window beyond the typical 90-day post-employment period. This would give you more time to see how the company performs with that Q3 product launch you mentioned. Also, make sure you understand exactly what type of options you have (ISO vs NSO) as this affects the tax treatment. With ISOs, you generally have better tax advantages if you hold the stock for at least one year after exercise and two years after grant date to qualify for long-term capital gains treatment. Given that you're essentially guaranteed a loss if you exercise now, it might be worth having a conversation with your company about either repricing the options to current FMV or extending your exercise window. Many companies are becoming more flexible about this, especially in situations like yours where the employee would be financially penalized through no fault of their own.

As someone who recently navigated a similar non-resident alien tax situation, I wanted to share a few practical tips that helped me get through the HSA and IRA filing process. For the Form 8889 issue with Sprintax - I found it helpful to complete the Sprintax return first, then print out a draft to see exactly where the HSA deduction should flow. The key is making sure the deduction amount from Form 8889 gets properly reflected on Schedule 1, Line 13, and then recalculating your AGI manually. I used a simple spreadsheet to track the adjustments and make sure everything balanced. One thing I learned the hard way - if you're filing electronically through Sprintax, you'll need to print and mail your return anyway once you attach the manual Form 8889. The IRS systems can't process mixed electronic/paper filings, so you lose the e-file option. For the IRA deduction question - since you mentioned you're on a TN visa from Canada, you should definitely be eligible for the deduction assuming you meet the income requirements. The US-Canada tax treaty actually has favorable provisions for retirement savings. Just make sure you're not also claiming RRSP contributions in Canada for the same income, as that could create treaty complications. One final tip - keep detailed records of all your manual calculations and adjustments. If the IRS has questions later, you'll want to be able to show exactly how you arrived at your numbers.

I wanted to add another perspective as someone who dealt with a similar HSA/IRA situation as a non-resident alien. One thing that caught me off guard was the timing requirements for HSA contributions versus when you can actually claim the deduction. Even though you can contribute to your HSA through April 15th for the previous tax year, if you're manually filing Form 8889 with your non-resident return, you'll want to make sure all contributions are actually completed before you file. Unlike regular filers who might estimate and adjust later, the manual process makes corrections much more complicated. For your IRA situation on the TN visa - definitely confirm your contribution limits based on your earned income. As a non-resident alien, you can only contribute up to 100% of your US earned income or the annual limit ($7,000 for 2024), whichever is less. This is different from residents who might have other forms of compensation that count. Also, one practical tip for the Sprintax + manual Form 8889 approach - complete everything in Sprintax first, then print the entire return. Fill out Form 8889 separately, and physically attach it to the printed return before mailing. Don't try to modify the Sprintax PDF directly as it can cause formatting issues that might confuse IRS processing. The manual recalculation process mentioned by others is definitely doable - I found it helpful to work backwards from the final tax owed to make sure my adjustments were correct.

I'm also an F1 student and just wanted to add my experience to help others in this situation. I received the same $1400 EIP3 payment last year despite filing 1040NR forms consistently. Initially I was confused and worried about keeping money that wasn't rightfully mine. After researching and consulting with my university's tax office, I learned this was a widespread issue affecting many non-resident aliens due to automated IRS systems that didn't properly distinguish between resident and non-resident filers during the pandemic relief distribution. I returned the payment by sending a cashier's check made out to "United States Treasury" along with a detailed letter to my regional IRS processing center. The letter included my SSN, explained my F1 non-resident status, and specifically stated I was returning an "Economic Impact Payment received in error." I sent everything certified mail and kept copies of all documents. About 7 weeks later, I received an acknowledgment letter from the IRS confirming they had processed my returned payment. This documentation was crucial for my peace of mind, especially considering how thoroughly immigration applications review tax compliance history. My advice: contact your international student office immediately - they likely have template letters and the correct IRS address for your region. Don't wait for the IRS to discover the error later, as proactive return creates a clean paper trail that protects you during any future immigration processes.

I'm also on F1 visa and went through this exact same situation about 6 months ago! Like many others have mentioned, this was definitely the third Economic Impact Payment (EIP3) that was incorrectly distributed to non-resident aliens due to IRS system errors during the pandemic. When I first received the $1400, I was completely confused since I had been consistently filing 1040NR forms. After doing research and talking to other international students, I realized this was a widespread issue that affected many F1 students. I decided to return the payment proactively rather than risk future complications. I sent a money order for $1400 made out to "United States Treasury" along with a letter explaining my non-resident alien status on F1 visa. I included my SSN, referenced the specific payment amount and approximate date received, and clearly stated I was returning an Economic Impact Payment received in error. The key was sending everything via certified mail to my regional IRS processing center - my university's international student office helped me identify the correct address. About 8 weeks later, I received an official acknowledgment letter from the IRS confirming they had processed my returned payment. Having that documentation has given me huge peace of mind, especially knowing that any tax compliance issues could potentially affect future OPT applications or status changes. My advice would be to contact your international student office right away - they likely have experience with this issue and can provide templates and guidance to make the process smooth and properly documented.

I think everyones missing the elephant in the room. if ur spending 300k+ on a rolls, the tax break shouldn't be the deciding factor!! either u can afford it or u cant. trying to get uncle sam to subsidize ur luxury car is exactly why they tighten these rules.

As someone who's worked in tax preparation for over 15 years, I'd strongly caution against this strategy. While you're technically correct that vehicles over 6,000 lbs GVWR qualify for heavy vehicle treatment, the IRS has gotten increasingly aggressive about challenging luxury vehicle deductions. The "ordinary and necessary" test is subjective and heavily scrutinized for expensive vehicles. Even if you win an audit, the time, stress, and professional fees will likely exceed any tax savings. I've seen clients spend $50,000+ in legal and accounting fees defending $30,000 in tax benefits. Consider this: if your business truly needs a luxury vehicle for client relations, document that business need thoroughly BEFORE purchasing. Get client feedback, industry standards, competitor analysis - anything that shows this vehicle level is expected in your industry. Without that foundation, you're essentially gambling with the IRS. The smart money says buy what you can afford without the tax break, or find a more defensible vehicle that still meets your business needs.