Um, isn't there a tax exemption for scholarships and fellowships? My roommate is on a full-ride scholarship and she told me she doesn't pay taxes on any of it. Super confused why some people have to pay taxes on this stuff and others don't...

As a fellow grad student who went through this same confusion, I can confirm what others have said - fellowship money for living expenses is definitely taxable income. The key thing that helped me was understanding that the IRS distinguishes between "qualified educational expenses" (tuition, required fees, books) which are tax-free, versus everything else which is taxable. Since your tuition is covered separately and the fellowship is for living expenses, you'll need to report the full amount as income. Even though your university won't send you a 1099 or withhold taxes, you're still responsible for paying them. I'd strongly recommend setting up quarterly estimated tax payments once you know your fellowship amount for the year. I made the mistake of waiting until filing season and got hit with an underpayment penalty. The IRS Form 1040-ES has worksheets to help calculate what you owe. Also, keep detailed records of any educational expenses you pay out of pocket - while they won't reduce your taxable fellowship income, they might qualify for education tax credits that can lower your overall tax bill.

Anyone know if it matters which tax filing status to pick with a partner who isnt a spouse? Like should OP file as Head of Household since they're supporting the partner and baby, or just Single? Seems like it would make a big difference for tax brackets.

Great question about filing status! You'll definitely want to file as Head of Household rather than Single since you have a qualifying child (your baby). Head of Household has better tax brackets and a higher standard deduction than Single status. The requirements are pretty straightforward in your case: you're unmarried, you're paying more than half the household expenses, and your baby lived with you for more than half the year (even if born late in the year, newborns count). Your partner's dependency status doesn't affect your ability to file HOH - having the baby as a qualifying person is enough. The tax savings from HOH vs Single filing status can be substantial, especially combined with the Child Tax Credit. Just make sure when you're using TurboTax that you select Head of Household and not Single - it'll walk you through confirming you meet the requirements but sounds like you clearly do!

I'm in a similar situation as a commissioned sales rep and want to share what I learned after going through this exact same confusion last year. The federal deduction elimination really stings, but there are still some legitimate strategies to explore. First, definitely look into state deductions if you're in a state that didn't conform to the federal changes. Second, consider having a conversation with your sales manager about expense reimbursement - many dealerships are willing to reimburse legitimate business expenses if you can make a case for it, especially if you're a solid performer. Also, make sure you're tracking everything meticulously even if you can't deduct it federally right now. The suspension of employee business expense deductions is scheduled to expire in 2026, so having good records could pay off when that deduction potentially returns. One thing I wish I'd known earlier: some training expenses might qualify for education credits instead of business deductions, which could still provide tax benefits even as a W2 employee. Worth looking into with a tax professional who understands sales compensation.

As a fellow commissioned salesperson, I feel your pain on this issue. I went through the same frustration when I realized how much the 2018 tax changes affected people like us. One thing that really helped me was creating a detailed expense tracking system right away, even though I can't deduct most of it federally. I use a simple spreadsheet that categorizes everything - phone bills, client meals, training, car expenses, etc. This serves two purposes: it helps me see where my money is actually going (which was eye-opening), and it keeps me prepared for when the federal deduction potentially returns in 2026. For the immediate term, definitely explore your state options if you haven't already. Also, don't overlook the education credit angle that others mentioned - I was able to claim credits for some professional development courses that didn't qualify as business deductions. The employer reimbursement route is probably your best bet for getting money back now rather than waiting for potential tax benefits later. Most successful salespeople I know have been able to get at least partial reimbursement for things like client entertainment and industry training once they showed how it directly impacts their numbers. Keep detailed records of everything, and hang in there - this tax situation for commissioned employees really needs to change, but there are still some legitimate strategies to explore in the meantime.

I'm dealing with a very similar situation - just received a Square 1099-K for about $3,900 in manufactured spend activity and was initially panicking about the tax implications. This thread has been absolutely invaluable in understanding the proper approach! The consistent advice about using Schedule C to report the 1099-K amount as gross receipts while offsetting it with equal expenses makes perfect sense. What's particularly reassuring is seeing multiple people who've actually gone through this process successfully, including those who've been audited and came out fine with proper documentation. I'm already implementing the spreadsheet tracking system that several people mentioned - documenting each gift card purchase, the processing through Square, and the bank deposits. The transparency approach definitely seems like the safest route rather than trying to ignore or hide the 1099-K. One thing I appreciate about this discussion is how it emphasizes that manufactured spend isn't about tax evasion - it's about properly reporting transactions that don't represent actual income. The key is having thorough documentation to prove the circular nature of the money flow. For anyone else in this situation, this thread really demonstrates that with proper record-keeping and transparent reporting on Schedule C, handling a Square 1099-K from MS activity is completely manageable. Thanks to everyone who shared their real experiences and detailed strategies!

I'm new to this community but found myself in the exact same situation - just received a Square 1099-K for about $5,800 in manufactured spend activity and was completely overwhelmed until I discovered this thread. The detailed advice here has been incredibly helpful, especially the consistent recommendation to report everything transparently on Schedule C with offsetting expenses. What really gives me confidence is seeing actual examples from people like Sean O'Brien and Jayden Hill who've successfully navigated this process, including through audits. I'm already implementing the documentation strategies mentioned - creating a detailed spreadsheet tracking each gift card purchase through Square processing to bank deposits, keeping credit card statements, and preparing a clear explanation of the circular money flow. One thing that really resonates with me is how everyone emphasizes that this isn't about tax evasion, but properly reporting transactions that represent personal fund cycling rather than actual business income. The transparency approach of acknowledging the 1099-K and offsetting it with equal expenses seems much safer than trying to ignore it. For anyone else dealing with their first Square 1099-K from MS activity, this thread demonstrates that with proper documentation and Schedule C reporting showing zero net profit, this situation is completely manageable. The key is treating it like legitimate business record-keeping even though it's just personal funds moving in a circle. Thanks to this community for sharing such valuable real-world experiences - it's transformed what seemed like a tax nightmare into something I can handle confidently!

Just wanted to add my experience as someone who's been trading US stocks through IBKR for about 3 years now. A few practical tips that might help: 1. **Record keeping is crucial** - I created a simple spreadsheet to track all my trades with the AUD/USD exchange rate on each date. This saves so much time at tax time. The ATO accepts RBA rates, so I just pull those. 2. **Quarterly dividend tracking** - US companies often pay quarterly dividends, so you'll get multiple small payments throughout the year. Each one needs to be converted to AUD and reported. IBKR's activity statements make this easier, but you still need to do the currency conversion. 3. **Don't forget about franking credits** - Since you're getting into US shares, remember that you lose the benefit of franking credits that Australian shares provide. This might affect your overall tax strategy, especially if you're in a higher tax bracket. 4. **Consider your CGT discount eligibility** - The 50% CGT discount for assets held over 12 months can make a big difference on your US holdings. Just make sure you're tracking your holding periods correctly. The W-8BEN form is definitely essential - without it, you'll pay 30% withholding instead of 15%. IBKR makes it pretty easy to complete online in your account portal. One last thing - if you're planning to invest more than $50k AUD in foreign assets, you'll need to report this on your tax return even if you don't sell anything. It's called the "foreign investment" question and catches a lot of people off guard.

As someone who's been navigating this exact situation for the past two years, I can confirm most of the advice here is spot on. One additional point that might help - when you're starting out with IBKR and US shares, consider setting up automatic currency conversion within your IBKR account. This can help reduce the number of FX transactions you need to track separately. I made the mistake of manually converting AUD to USD for each trade in my first year, which created dozens of additional FX transactions that I had to account for separately on my tax return. Now I keep a USD balance in my IBKR account and convert larger amounts less frequently, which simplifies the record keeping significantly. Also, regarding the estate tax discussion - it's worth noting that the Australia-US tax treaty does provide some protections, but they're limited. If you're approaching that $60k USD threshold, definitely worth getting specific advice from a cross-border tax specialist rather than trying to navigate it yourself. The consequences of getting it wrong can be significant for your beneficiaries. One last practical tip: IBKR's trade confirmations and monthly statements are your best friends come tax time. Set up a folder system to save these documents as you go - don't wait until March to start hunting for paperwork from the previous July!