Still confused about filing requirements - 1040 and 1042-S for retirement withdrawal?

Hey everyone, I'm really struggling to make sense of my tax situation and could use some help... I was living in Texas from November 2019 until September 2021, which made me a tax resident in the US for 2021. This means I need to file a 1040 for this tax year. The complication is that I decided to cash out my US retirement savings in November 2021 after I moved back to Australia (didn't make sense to keep it there). When I withdrew the funds, they withheld a significant amount for taxes (I think the maximum rate plus the 10% early withdrawal penalty). I just found out I'll be receiving a 1042-S form for this income, which I thought was only for non-residents/foreign nationals. **Does anyone know if tax software like Sprintax will let me include my 1042-S income when filing my 1040?** If not, how do I go about trying to recover some of the tax that was withheld? I'm pretty sure they took too much. Thanks for any guidance!

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19 comments

Isaac Wright

•8M

You're dealing with a somewhat unique situation, but I can help clear things up for you. When you're a resident alien for part of the tax year (your time in Texas) but a nonresident for another part (after moving to Australia), you're what's called a "dual-status alien" for tax purposes. This usually means filing a 1040 for the resident portion and a 1040NR for the nonresident portion. The 1042-S form is typically used to report income paid to foreign persons, including retirement distributions to nonresidents. Since you received your distribution after leaving the US, the payer treated you as a nonresident and used the 1042-S. Regarding your question about Sprintax - yes, it's designed specifically for situations like yours and should allow you to report your 1042-S income. You'll need to indicate your dual-status, and the software should guide you through reporting both types of income. If too much tax was withheld (which is common with foreign distributions), filing correctly should result in a refund of the excess withholding. The standard withholding rate for nonresidents is 30% plus any applicable penalty, which might be higher than your actual tax liability.

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Isaac Wright

•8M

Receiving both a W-2 and a 1042-S means your employers classified your tax status differently. Your W-2 employer treated you as a US resident/citizen while the 1042-S issuer treated you as a nonresident alien. This often happens during transition years when you have income from both before and after changing your residency status. Standard tax software like TurboTax can handle dual-status returns but may not have specialized guidance for international situations. Sprintax and similar international-focused tax preparation software are specifically designed for these scenarios and generally provide better support for forms like 1042-S and dealing with foreign tax issues. They often save people in your situation a lot of headaches.

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Connor Murphy

•8M

After struggling with a similar situation last year (retirement withdrawal while overseas), I found an amazing service that helped me sort everything out. I used https://taxr.ai to analyze my 1042-S and other tax documents to figure out exactly how to file correctly. Their system scanned my 1042-S and calculated how much of my withholding I could potentially recover. For my situation, they identified that about $2,800 was withheld above what I should have owed based on tax treaties between the US and my country. The coolest part was that they explained exactly how to report this on my return depending on my specific situation. They even highlighted the specific forms and line numbers where I needed to report my retirement distribution.

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Connor Murphy

•8M

The service analyzes your tax documents and provides detailed guidance - you upload your forms and they tell you exactly what to do with them. It doesn't file the return for you, but gives you specific instructions you can follow with your chosen tax software. The system is actually really good with tax treaties. When I uploaded my 1042-S, it immediately identified the applicable tax treaty between the US and my country (Australia in my case), and showed me the specific articles that applied to my retirement distribution. It explained how the treaty reduced the withholding I should have been subject to and calculated the potential refund amount based on that.

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Amelia Dietrich

•8M

I wanted to follow up about the taxr.ai service mentioned above. I was skeptical at first but decided to try it since my situation with 1042-S and 1040 filing was driving me crazy. It actually worked incredibly well! I uploaded my 1042-S and some other financial documents, and the system immediately identified that my university had withheld at 30% when the US-Canada tax treaty should have limited it to 15% for my type of income. The analysis showed I was eligible for about $3,200 in refundable withholding. The step-by-step instructions made it easy to enter everything correctly in my tax software. I was especially impressed with how it handled the treaty articles - it even gave me the exact treaty article numbers to reference on my return. Just got my refund last week!

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Kaiya Rivera

•8M

If you're struggling to get answers directly from the IRS about your 1042-S situation, I highly recommend using https://claimyr.com to get through to an actual IRS agent. I spent weeks trying to call about my similar situation (had both 1040 and 1042-S forms), but kept getting disconnected or waiting for hours. With Claimyr, I got through to an IRS representative in about 20 minutes who confirmed exactly how I should handle reporting my retirement distribution as a dual-status taxpayer. They have a really helpful demo video at https://youtu.be/_kiP6q8DX5c that shows how it works. The IRS agent I spoke with confirmed that I needed to file as a dual-status taxpayer and explained exactly how to report the 1042-S income on my return. Apparently this is a common issue they deal with, and getting that official guidance gave me peace of mind before filing.

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Kaiya Rivera

•8M

Yes, you actually can get through! The IRS does answer their phones, but the problem is the massive call volume they handle. What Claimyr does is automate the calling process - it basically waits on hold for you and then calls you when it reaches a human agent. The service doesn't "skip the line" or anything shady - it just handles the frustrating part of waiting on hold. I was skeptical about how well it would work too, but when my call connected and I heard an actual IRS agent, I was honestly shocked. It saved me from what would have probably been hours of redial attempts and hold music.

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Noah Irving

•8M

I need to eat my words about Claimyr. After my skeptical comment, I was still desperate for answers about my 1042-S situation, so I decided to try it anyway. I'm completely shocked - I actually spoke to a real IRS agent yesterday! The service called me when it reached someone (took about 35 minutes) and suddenly I was talking to an actual person at the IRS. The agent walked me through exactly how to report my foreign pension distribution that generated a 1042-S while I was partially a US resident. For anyone dealing with this dual-status 1040/1042-S situation, the agent confirmed that filing as a dual-status alien is correct, and that the 1042-S income needs to be reported on the 1040 for the resident period if that's when you were entitled to the income. This completely cleared up my confusion!

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Vanessa Chang

•8M

One thing to watch out for with the 1042-S - check your tax treaty! I'm from Ireland and we have specific provisions for retirement accounts in our treaty with the US. I was able to get back almost half of what was withheld because the treaty rate was much lower than the standard 30% withholding. The key is making sure you properly claim the treaty benefit on your return. If you were a resident when you contributed to the retirement plan but nonresident when you withdrew, it gets complicated.

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Vanessa Chang

•8M

You'll need to attach Form 8833 (Treaty-Based Return Position Disclosure) to your tax return if you're claiming treaty benefits. On the form, you'll need to cite the specific treaty article that applies to your situation. For retirement accounts specifically, you'll report the income normally on your return, but then identify the applicable treaty article that modifies how it's taxed. The exact location depends on what type of retirement account it was - for example, 401(k) distributions typically go on line 5 of Form 1040, but you'd need to include Form 8833 explaining why the treaty reduces your tax liability.

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