Important note about the Safe Harbor Rule that a lot of people miss: the 110% threshold is based on your AGI from the previous year. So if your AGI was over $150k in 2023, you need to have paid at least 110% of your 2023 tax liability through withholding or estimated payments to be protected in 2024. If your AGI was under $150k in 2023, you only need to have paid 100% of your 2023 tax through withholding to qualify for Safe Harbor protection. Based on your numbers, you're well above either threshold, so you shouldn't have any penalty.

Hey I had this exact problem last year with TurboTax. It showed a penalty until I reached the very end of the return. Then suddenly during the final review it applied the Safe Harbor exception and removed the penalty. It's just a quirk with how the software calculates things before it has all the information.

Has anyone used H&R Block for filing with treaty benefits? I'm in the same situation with a South Korea-US treaty but wondering if their software can handle this or if I should look elsewhere.

I went through this exact same situation with my university in Germany before transferring to a US school! The key thing to understand is that when your university withholds taxes incorrectly despite treaty exemptions, you're essentially getting an involuntary loan to the government that you need to claim back. Here's what worked for me: File Form 8833 as others mentioned, but also make sure to keep detailed records of ALL correspondence with your university about the treaty. When NFU told you to "just claim it on your taxes," get that in writing if possible. The IRS sometimes asks for documentation showing you tried to resolve it at the source first. One thing I learned the hard way - if you're claiming the same treaty exemption year after year, you need to file Form 8833 EVERY year, not just the first time. Also, make sure your university is correctly coding your income on the 1042-S or W-2. Sometimes they use the wrong income codes which can complicate your filing. The good news is that once you get the process down, it becomes pretty routine. I've been doing this for three years now and it's gotten much easier. Just don't let the university's laziness cost you money - you're entitled to that exemption!

Just wanted to add my experience - I ended up going with a local CPA who charged $125 for ITIN renewal as a Certifying Acceptance Agent. The price included document verification and submitting everything to the IRS. What really helped me was calling around to multiple places first. I got quotes ranging from $75 (at a community tax center) to $250 (at a fancy downtown firm). The $200 quote you got isn't outrageous, but you can definitely find it cheaper if you shop around. One thing to ask when getting quotes: make sure they're actually a CAA (Certifying Acceptance Agent) so you don't have to mail your original documents. Some places will charge you the same amount but still make you mail everything yourself, which defeats the purpose of paying someone!

I went through ITIN renewal last year and ended up doing it myself after getting similar quotes around $150-200. The Form W-7 really isn't that complicated if you read through the instructions carefully - it's mostly basic personal information and checking boxes for why you need the ITIN. The biggest decision is whether you want to mail your original documents to the IRS (free but risky) or pay a Certifying Acceptance Agent to verify them in person. I ended up getting certified copies of my documents from the issuing agencies instead, which cost me about $25 total but gave me peace of mind. If you do decide to pay someone, definitely shop around and make sure they're a legitimate CAA. You can actually search for authorized agents on the IRS website. Also ask exactly what's included - some places charge extra fees on top of their base rate that they don't mention upfront.

Just wanted to chime in and say your parents might notice in other ways even if they don't see it on taxes. My parents found out about my "secret" job when they saw deposits in my bank account that I couldn't explain. If you share any bank accounts with them or they can access your statements, they might notice that way.

As someone who went through this exact situation a few years ago, I can confirm what others have said - your parents absolutely will NOT see your income on their tax return when they claim you as a dependent. The dependency claim is completely separate from your earnings. However, I'd recommend being proactive about a few things: 1) Make sure your employer has an address where your parents won't see mail (like a PO box or friend's address), 2) Set up your own bank account if you haven't already, and 3) File your own tax return since you're over the $2,300 threshold - but mark that you can be claimed as a dependent. The tax system is designed to keep individual returns private, even within families. Your parents' return will only show that they're claiming you - nothing about what you earn or where you work. You've got this!

Just to add a data point - I've been in this exact situation (work in Nevada, live in Arizona) for 3 years. I use FreeTaxUSA and it handles it perfectly. You're right that Nevada has no state income tax so you only need to file an Arizona return, but you do need to report all your income to Arizona since you're a resident. One thing nobody mentioned yet - if you spend a lot on gas for that commute, keep track of those expenses! While you can't deduct commuting expenses generally, if your employer reimburses you for any business travel (separate from commuting), that could be tax-relevant.

Great thread! I'm actually a tax preparer and wanted to clarify a few things I'm seeing in the responses. You're absolutely correct that Nevada has no state income tax, so ignore any "withholding" you think you're seeing for Nevada state taxes - that's likely something else on your paystub. Since you're an Arizona resident, you'll file a full Arizona resident return reporting ALL your income, including what you earned in Nevada. Arizona taxes you on worldwide income as a resident. A few practical tips: 1) Consider asking your employer to withhold additional federal taxes that you can apply toward your Arizona state tax liability, 2) You might want to make estimated quarterly payments to Arizona to avoid underpayment penalties, and 3) Keep excellent records of your work location if you ever work from home in Arizona - those days create Arizona-sourced income. The standard tax software like TurboTax, H&R Block, or FreeTaxUSA can absolutely handle this situation. You don't need a professional unless you have other complicating factors. This is actually one of the simpler multi-state scenarios since Nevada has no income tax!