Great question! I went through this exact confusion last year. Your $67.5k distributions should definitely NOT go on line 7 of Form 1120S - that's only for officer compensation (your $60k salary). Here's the correct treatment: - Line 7 (Form 1120S): Your $60k salary as officer compensation - Schedule K-1, Box 16 Code D: Your $67.5k distributions The key thing to remember is that distributions aren't a deductible business expense - they're just you taking out profits that have already been taxed at the corporate level. TaxAct should handle this correctly if you categorize them as "shareholder distributions" in the software. One tip: make sure your books show these distributions coming out of retained earnings or current year profits, not as an expense account. This will help everything flow correctly through the tax software and avoid any confusion during filing.

Just to add another perspective - I've been running my S-Corp for 6 years now and this distributions vs. salary classification is one of the most common mistakes I see new S-Corp owners make. You're absolutely right to double-check this! Your setup sounds very similar to mine. The $60k salary goes on line 7 as officer compensation (and should match your W-2), while the $67.5k distributions only appear on your K-1 in Box 16, Code D. One thing that helped me understand this better: think of distributions as withdrawing money you've already earned and will pay personal income tax on (via the K-1), while salary is a business expense that reduces the S-Corp's taxable income. That's why distributions can't be deducted on the 1120S - they're not an expense, just a withdrawal of profits. Your salary-to-distribution ratio looks reasonable for IRS purposes too. Keep good records of when you took each distribution throughout the year - it helps if you ever get questioned about the timing or amounts.

Has anyone used TurboTax for filing as a non-resident alien? I'm in the same boat as OP (just under 183 days) and wondering if the standard tax software handles these situations well?

I went through this exact same situation two years ago and can confirm what others have said - the IRS does NOT round up the substantial presence test calculation. At 182.33 days, you're under the 183-day threshold and would not be considered a US tax resident. However, I'd strongly recommend double-checking your day count because being this close to the line is risky. A few things to verify: Are you counting partial days correctly? If you arrive late at night or leave early morning, those still count as full days. Also make sure you're not missing any brief trips back to the US that might push you over. One other thing - since you mentioned wanting to avoid taxation on global income from before you moved, make sure you understand the rules about when income is sourced to the US versus your home country. Even as a non-resident, you'll still owe US taxes on US-source income during the time you were physically present here. Keep very detailed records of all your travel dates with supporting documentation (flight records, passport stamps, etc.) in case the IRS ever questions your residency determination.

I've been following this discussion with great interest as someone who's dealt with this exact frustration. After being locked out of IRA contributions for two years due to only having trading income, I finally found a solution that worked for me. Like many of you mentioned, I went the educational content route and it's been incredibly effective. I started by creating a simple course on risk management for options traders (something I wish I'd learned earlier in my trading journey). What surprised me was how much demand there was for practical, real-world trading education from someone who's actually making consistent profits. The key thing I learned is that you don't need to be a guru or have millions in profits to provide value. People want to learn from traders who are consistently profitable and can explain their strategies clearly. I generated about $9,500 in earned income last year from educational content, which allowed me to max out my IRA contribution for the first time in years. A few practical tips for anyone considering this path: - Start with what you know best. If you're successful with covered calls, teach that. If you've mastered risk management, focus there. - Keep detailed business records from day one. Time spent, expenses, client interactions - all of it matters for establishing this as legitimate earned income. - You don't need fancy production. Some of my best-selling content is just screen recordings of me explaining trades with simple PowerPoint slides. The time commitment is manageable - I probably spend 8-10 hours per week on educational content, and it hasn't hurt my trading performance. If anything, explaining my strategies to others has made me more disciplined in following them myself. Happy to answer any specific questions about getting started with this approach!

This thread has been incredibly enlightening! I'm in the exact same situation - been trading options successfully for about 18 months but completely locked out of retirement contributions due to the earned income requirement. It's maddening to be making $50k+ from trading but unable to put any of it toward retirement. The educational content approach that several people have shared sounds like the perfect solution. I've been documenting my strategies anyway, particularly around volatility trading and earnings plays, so turning that knowledge into a legitimate business makes total sense. @5405fa7ab1d2 your success story is really inspiring - generating $9,500 in educational income while maintaining trading performance shows this is actually doable. I love that you started with risk management content since that's such a crucial skill that many new traders overlook. One thing I'm curious about: for those who've gone this route, have you found certain types of educational content work better than others? I'm thinking about starting with some basic guides on managing risk in options trades, since I've developed some solid systems there. But I'm also wondering if one-on-one coaching sessions might be more valuable than courses. The time commitment of 8-10 hours per week sounds very reasonable, especially if it helps make me a more disciplined trader. I'm definitely going to start working on my first educational product this month. Thanks everyone for sharing such detailed, real-world advice - this has been more helpful than anything I've found elsewhere!

Just to add some clarity for everyone here - the $1,500 threshold that Alexander mentioned is specifically for when you're REQUIRED to file Schedule B. However, you can still choose to file it even if your interest is under $1,500 if you want to itemize your interest sources for your own records. For Natalie's original question: Yes, include ALL three amounts you mentioned - the $12 savings interest, $45 money market interest, and $200 CD interest. That totals $257, which you'd report on your main tax form. Since it's under $1,500, you technically don't need Schedule B unless you have foreign accounts or want the detailed breakdown for your records. One tip: Keep all your 1099-INT forms together when you file. Even though the amounts seem small, they all add up and the IRS will have copies of these forms, so you want to make sure your reported total matches what they have on file.

Great thread everyone! I'm also dealing with Schedule B for the first time and had a related question - what about interest from municipal bonds? I have some tax-free municipal bonds that earned about $85 this year. Do I need to report this anywhere on Schedule B or my tax return? I know it's supposed to be tax-free but I'm not sure if it still needs to be reported somewhere for informational purposes. Also, does anyone know if interest from Treasury bills (T-bills) gets reported the same way as regular bank interest? I have a few that matured this year and want to make sure I'm categorizing everything correctly.

I noticed nobody mentioned state taxes. Depending on your state, you might need to add the HSA distribution to your state taxable income too. Some states like California don't recognize HSAs at all, which makes it even more complicated. FreeTaxUSA should handle this automatically, but it's good to be aware.

I went through this exact same situation a couple years ago and want to add something that might help save you some money. Before you finalize everything in FreeTaxUSA, double-check if any portion of your HSA withdrawal might qualify for penalty exceptions under IRS Publication 969. There are several situations where the 20% penalty can be waived - things like disability, unemployment for more than 12 weeks, certain higher education expenses, or first-time home purchase (up to $10,000). Even if the expenses weren't medical, you might still avoid the penalty if you meet one of these other criteria. When you're in the HSA section of FreeTaxUSA, there should be questions about whether you qualify for any penalty exceptions. Don't just assume you'll pay the full 20% penalty without checking these options first. I saved myself about $600 by discovering I qualified for the unemployment exception.