As someone who works in tax preparation, I see this confusion about Notice 703 Line C come up constantly! You're definitely not alone in being confused by this. The key insight that helps my clients is understanding that the IRS is essentially asking two separate questions: 1. "How much Social Security did you receive?" (Line A, with Line B being half of that) 2. "What other taxable income did you have?" (Line C) Line C is exclusively for non-Social Security income sources. So when it says "total income that is taxable (excluding line A)," it's telling you to exclude ALL Social Security-related amounts - which includes both Line A AND Line B since Line B is derived from Line A. Your other income for Line C would include things like: - W-2 wages - 1099-R pension/retirement distributions - 1099-INT interest income - 1099-DIV dividend income - Self-employment income - Rental income - Capital gains The reason the IRS structures it this way is because Social Security has special taxation rules. They need to calculate your "provisional income" (Line E = B + C + D) to determine what percentage of your Social Security benefits will actually be taxable. This is completely different from how regular income is taxed. Hope this helps clarify the distinction! The form design is definitely not intuitive, but once you understand the underlying logic it makes more sense.

I'm so grateful for this thread! I've been staring at my Notice 703 for weeks trying to figure out this exact same Line C issue. Reading through everyone's explanations, I finally understand that Line C is ONLY for non-Social Security income sources. The "bucket" analogy from Lily really helped me visualize it, and Jacob's professional breakdown about the two separate questions the IRS is asking makes perfect sense. I was definitely overthinking it by trying to include Line B in Line C just because it's "taxable income." Now I see that the whole point is to keep Social Security calculations (Lines A and B) separate from everything else (Line C) so they can properly calculate provisional income. It's like the IRS needs to know "here's your Social Security" and "here's your other stuff" as distinct categories, then they combine them in their own special way to figure out taxation. Thanks to everyone who shared their experiences and explanations - this community is amazing for helping navigate these confusing IRS forms!

Reading through all these responses, I'm really glad I found this thread before submitting my forms! I was actually in the middle of reaching for the white out when I decided to search online first. Based on everyone's advice here, I'm definitely going to switch to e-filing. It sounds like the time I'll save avoiding potential IRS delays and complications will more than make up for the hour or so it'll take to re-enter my information into tax software. One question for those who've made the switch from paper to e-filing mid-process - did you find that the software asked for any information you hadn't already gathered for your paper forms? I want to make sure I have everything I need before I start so I don't have to stop halfway through to hunt down additional documents. Thanks everyone for saving me from what sounds like it could have been a major headache with the IRS!

I've been lurking in tax forums for years but had to create an account to chime in here. I work as a volunteer tax preparer through the VITA program, and I see this white-out question come up constantly during tax season. The short answer: absolutely do NOT use white-out on tax forms. The IRS processing systems are designed to scan forms cleanly, and correction fluid can cause your return to be automatically flagged for manual review, which adds weeks or months to your processing time. What I tell people in your situation: if you're comfortable posting questions online and following detailed advice, you're definitely capable of e-filing. The software will walk you through everything step by step, catch errors you might not even notice, and you'll get your refund in a fraction of the time. One pro tip - if you do switch to e-filing, don't just transfer your numbers blindly. Let the software guide you through the interview process because it often finds additional deductions or credits that people miss when filling out paper forms manually. I've seen people discover they qualified for credits worth hundreds of dollars that they would have missed otherwise. Your transposed W-2 income is exactly the kind of error that benefits most from e-filing - the software will verify your entries against common ranges and flag anything that looks unusual before you submit.

Don't forget to look into whether you qualify for the self-employed health insurance deduction! Even though your wife's employer provides the insurance, if you're paying any portion of the premiums (either directly or indirectly by reimbursing your wife), you may be able to deduct that amount on your Schedule C. I'm in a similar situation and was able to deduct about 40% of our family premium last year because that was determined to be "my portion" of the coverage. Talk to a tax professional about how to calculate and document this properly.

I've been following this thread closely since I'm in an almost identical situation - sole proprietor with coverage through my spouse's employer plan. Just wanted to add a few things that might help: First, definitely pursue the FSA option that Leo mentioned. We've been using one for three years now and it's been great for predictable expenses like glasses, dental work, and prescriptions. The key is to be conservative with your contribution since you can't roll over much to the next year. Second, on the self-employed health insurance deduction - this is real but requires careful documentation. You'll need a letter from your wife's HR department breaking down the premium allocation. In our case, the employer contributes $200/month toward employee-only coverage, but we pay an additional $450/month to add me and our kids. I can deduct a portion of that $450 as a self-employed person. One thing I haven't seen mentioned is that you can also deduct qualified medical expenses as business expenses if they're directly related to your work. For example, if you need ergonomic equipment for your home office due to a medical condition, that could be deductible. Obviously consult a tax pro for specifics. The bottom line is that while you can't get an HSA in your situation, there are still several ways to get tax advantages for healthcare costs as a self-employed person. It's worth spending some time (or money on professional advice) to make sure you're maximizing all available options.

This is incredibly helpful information! I'm actually in a very similar situation as the original poster - no tax treaty with the US and was completely avoiding Treasury investments because I assumed I'd lose 30% to withholding. Just to make sure I understand correctly: if I'm a non-resident alien from a country without a US tax treaty, I can invest in Treasury bills and the interest income will be completely exempt from US withholding tax as long as I properly file a W-8BEN form? This seems almost too good to be true given how restrictive US tax rules usually are for foreign investors. Also, does this exemption apply equally to all Treasury maturities (3-month, 6-month, 1-year bills) or are there any restrictions based on the term length? I want to make absolutely sure before I start investing significant amounts.

I want to add another perspective on this since I went through the same confusion last year. The exemption for Treasury securities is real and well-established, but I'd strongly recommend getting everything in writing from your broker before making large investments. When I first tried to purchase Treasury bills, my broker's system automatically applied the 30% withholding despite having a W-8BEN on file. It took three phone calls and providing them with specific references to IRS Publication 519 and Section 871(i)(2)(A) before they corrected their system. Some brokers, especially smaller ones, aren't familiar with this exemption since most foreign clients stick to other investments. I'd suggest doing a small test purchase first to make sure the withholding is handled correctly before committing larger amounts. Also, keep all documentation showing the exemption was properly applied - it makes tax filing much easier in your home country when you can clearly show no US taxes were withheld. The exemption is legitimate and incredibly valuable for non-resident investors, but the implementation can sometimes be bumpy depending on your financial institution's familiarity with the rules.

As someone who's played the "refresh WMR until your finger falls off" game many times (I should probably seek therapy for this), I can confirm it updates daily - but that doesn't mean YOUR status will change daily. It's like checking the mailbox every hour won't make a package arrive faster! The system batches updates, which is why people notice patterns. The transcript is actually more reliable, though it sometimes speaks in a language only tax professionals and ancient wizards understand.

I've been dealing with this same frustration! Filed on March 8th and have been checking obsessively. From my experience this year and talking to my CPA, the WMR tool does technically update daily around 6 AM EST, but the actual processing happens in weekly batches at different IRS centers. So while the system refreshes daily, your individual status might only change when your batch gets processed. I noticed mine finally moved from "received" to "approved" on a Thursday morning, which seems to align with what others are saying about end-of-week processing cycles. For moving expenses, you might also want to check if you qualify for any deductible moving costs on your return - every little bit helps when you're starting post-graduation life!