This is such a helpful thread! I'm in a similar situation as a freelance writer working from Mexico for several US clients. The consensus here about foreign-sourced income not being subject to US withholding (even without a tax treaty) matches what I've experienced, but I wanted to add one practical tip. When negotiating contracts, I always include a specific clause stating that "all services under this agreement will be performed exclusively outside the United States" and require the client to acknowledge this in writing. This has helped me avoid the back-and-forth confusion that many of you described with your employers' accounting departments. I've also found it useful to proactively send my clients a brief explanation of the tax rules along with my completed W-8BEN form at the start of our working relationship. Most US companies appreciate the clarity upfront rather than discovering the tax implications after they've already set up their payroll systems. For those dealing with resistant clients, I recommend pointing them to IRS Publication 515, which clearly explains the sourcing rules for compensation for personal services. Having the official IRS guidance usually resolves any lingering doubts from their side.

This thread has been incredibly helpful! I'm dealing with a very similar situation as a software developer working from Brazil for a US startup. The information about foreign-sourced income not being subject to US withholding has been eye-opening. One thing I'd like to add for other Brazilian contractors: make sure you understand how this affects your tax situation with Receita Federal. Since you'll be receiving the full payment without US withholding, you'll need to declare this as foreign income on your DIRPF and pay Brazilian taxes on it. The good news is that you can often claim this as "rendimentos recebidos do exterior" which sometimes has more favorable tax treatment. Also, for those mentioning the W-8BEN form - in my experience, most US companies' accounting software automatically flags foreign contractors for 30% withholding until they have a properly completed W-8BEN on file. Even though you'll leave Part II blank (no treaty benefits), having that form completed and submitted promptly is crucial to avoid any withholding delays. Has anyone here dealt with the situation where a US client initially withholds taxes by mistake and then needs to refund them? I'm curious about the process for getting those funds back if it happens.

This is really helpful information everyone! I'm dealing with a similar situation where I need to understand my deceased uncle's financial situation for probate purposes. He lived in the US for about 10 years before passing away, and I'm his executor but live in Mexico. From what I'm reading here, it sounds like I definitely need his Form 1040 rather than just the W-2s his employer sent me. The estate attorney mentioned we need to account for ALL his income sources, and now I understand why - the W-2 would only show his job income, not any investments, rental properties, or other income he might have had. Does anyone know if there's a specific process for getting tax documents when you're handling an estate? I'm worried about the IRS phone situation that others mentioned - I can't afford to spend days on hold trying to get through to them.

For estate purposes from Mexico, you're absolutely on the right track wanting the Form 1040 instead of just W-2s. As executor, you have legal authority to request tax transcripts using Form 4506-T, but there are a few important things to know: 1. You'll need certified copies of your letters testamentary or letters of administration from the probate court 2. Request Form 4506-T specifically for estates - it's slightly different from the regular version 3. Consider requesting transcripts for the last 3-4 years, not just the final year, as courts often want to see the complete financial history The IRS can mail transcripts internationally, but it takes 6-8 weeks. If you need them faster, you might need a US address for delivery. One tip: if your uncle had any business income (Schedule C), rental properties (Schedule E), or significant investments (Schedules B/D), those details will be crucial for the estate valuation. The probate court will want to see ALL income sources, not just his employment. Given the international complexity and time constraints of probate proceedings, getting connected to an IRS agent who can walk you through the estate-specific process could save you months of back-and-forth paperwork corrections.

Just a heads up, my cousin tried filing as MFJ without being legally married and got audited. The IRS made them refile separately and they had to pay about $4,200 in back taxes plus a 20% accuracy-related penalty on top. They also got flagged in their IRS account and have been getting more scrutiny on their returns for the last 3 years. The tax difference between filing properly vs improperly wasn't even worth the risk. Just get legally married if you want those MFJ benefits, or make sure one of you qualifies for Head of Household, which gets you some better tax breaks than just filing Single anyway.

This is a really important question that comes up a lot. Just to add to what others have said - the IRS is very clear that your marital status for tax purposes is determined by your legal status on December 31st of the tax year. No exceptions for "basically married" situations, unfortunately. One thing I haven't seen mentioned yet is that if you do decide to get legally married before December 31st, you can file as MFJ for the entire year, even if you only got married on December 30th. That's something to consider if you're planning to get married anyway. Also, when filing as Head of Household, make sure you keep good records of your household expenses (rent/mortgage, utilities, groceries, etc.) to prove you paid more than half the cost of maintaining the home. The IRS sometimes asks for this documentation during audits. The penalties for filing incorrectly aren't worth the risk. Head of Household status will give you better tax benefits than Single anyway, and you'll avoid the stress and potential financial consequences of an audit.

Isn't this covered under Section 195 for startup expenditures? That's what I've used in the past when filling out the 4562 for similar costs.

Based on the discussion here, it sounds like Section 163 is the right approach for your loan acquisition costs. I went through something similar last year with our partnership's commercial property financing. One thing to double-check though - make sure you're distinguishing between different types of loan costs. Some costs like appraisal fees or environmental assessments might need to be capitalized into the property basis rather than amortized separately. The true financing costs (origination fees, points, etc.) are what go on the 4562 under Section 163. Also, just as a heads up, if any of those loan costs were paid by the seller on your behalf, those typically get added to your property basis instead of being amortized as financing costs. The IRS can be pretty specific about how these different costs are treated, so it's worth reviewing exactly what's included in your total. Good luck with the filing! The 4562 can be tricky but once you get the right code section it's much more straightforward.

Has anyone used the "specific identification" method when selling ESPP shares? I've heard you can choose which specific shares to sell to minimize taxes, but I'm not sure how to actually do this or if brokers support it.

One thing that might help you estimate your tax bill before selling is to gather all your wife's ESPP purchase records from 2015 onwards. You'll need the purchase dates, number of shares bought, actual purchase prices, and the fair market value on each purchase date. Since you mentioned you'll likely stay in the 15% tax bracket, here's some good news: for long-term capital gains (shares held over 1 year), taxpayers in the 10-15% ordinary income brackets often qualify for the 0% capital gains rate on at least a portion of their gains. This could significantly reduce your tax liability. For timing the sale, consider your total income for the year. If selling all at once would push you into the next tax bracket, it might be worth spreading the sales across tax years. You can use online tax calculators or consult with a tax professional to model different scenarios. Also, don't forget to check if your state has additional capital gains taxes - this varies widely by state and could affect your overall tax planning strategy.