Thank you for this insight - that's really helpful to know about them looking at earning potential. I have a question though - my earning history has been inconsistent because of contract work, with some years much higher than others. Will they just look at my highest earning year and assume that's my potential? Or do they take into account the volatile nature of contract work?

They typically look at an average of your recent years, but they'll definitely take into account your highest earning years as an indication of what you're capable of earning. However, if you can document that the contract work was irregular or that the industry has changed (especially with the company going bankrupt), that can help your case. Make sure to thoroughly document why your past income isn't representative of future earnings. Include any industry changes, health issues, or other factors that limit your earning potential going forward. The more documentation you provide showing why your situation has permanently changed, the better your chances of having them accept a reduced earning potential calculation.

Did you use a tax professional or do it yourself? I've been watching YouTube videos about the OIC process but everyone makes it seem so complicated. How long did the whole process take from application to acceptance?

I did it myself, though I spent about 3 weeks researching and preparing before submitting. It's definitely complicated but doable if you're organized. The whole process took about 9 months from submission to final acceptance. The key was being extremely thorough with the financial information and documentation. I literally sent them a binder with everything tabbed and indexed. The IRS assigned an offer examiner who called me twice to clarify some expenses, but otherwise the process was mostly waiting. When I got the acceptance letter, I paid the agreed amount within a week, and they released the federal tax lien about 30 days later. Just be prepared for a lot of paperwork and patience!

Oh no, I hadn't even thought about state taxes! We're in New York - do you know if they follow the federal rules for foreign income or have their own system? This is getting more complicated by the minute.

New York generally follows federal rules for income inclusion, so if you're reporting the rental income on your federal Schedule E, you'll need to include it on your NY return too. The one benefit is that NY does allow credits for foreign taxes paid, similar to the federal system. Some states like Nevada or Florida might be more advantageous for people with significant foreign income since they don't have state income tax. But for now, plan on reporting that Belgian rental income on both federal and NY returns.

Good point! Though I think Form 8833 is only required if you're taking a position that's contrary to the treaty or if you're claiming the treaty overrides an internal US law. Not everyone with foreign property needs it.

Where is this "notes section" you mentioned? Is that something in TurboTax or the actual IRS forms? I'm having a similar issue and want to make sure I do this right.

Sorry, I should have been more clear! In most tax software (I used TaxAct), there's a section where you can add miscellaneous information or notes when you're entering 1099 information. In the actual IRS forms, you can attach a statement labeled "Form 1099-K Name Discrepancy Explanation" that briefly explains the situation. If you're using TurboTax, look for the section where you enter your 1099-K information - there should be an option for "Notes" or "Add Additional Information." If you don't see it, you can always create a separate document explaining the discrepancy and attach it to your return as a PDF if filing electronically, or as a physical attachment if filing by mail.

Thanks for the inside info! So the rejection thing the IRS person told OP was just to scare them? I've been worried because my PayPal 1099-K has my username not my legal name lol

The IRS agent was being overly dramatic. The system won't automatically reject an e-filed return just because of a name mismatch on a 1099-K when the SSN matches. What likely happens is they were trying to motivate you to get it corrected because it makes their matching process easier. For your PayPal situation, that's super common! As long as your SSN is correct on the 1099-K, you should file using your legal name. The IRS matching program will flag it, but then verify the SSN and process it. You might get that CP2000 letter I mentioned asking you to confirm it's your income, but just respond promptly and you'll be fine.

I'm filing as Head of Household, not single - does that change the income limits for Form 8880? And do employer matches count toward the contribution amount for the credit, or just what I put in myself?

For Head of Household, the income limit for Form 8880 is $51,000 for 2022, so at $43k you should still qualify for at least a partial credit. The credit rate would be 10% of your qualified retirement contributions. Only your contributions count toward the credit, not your employer match. So if you contributed 5% of your salary, only that amount qualifies for the Saver's Credit. The employer match is great for your retirement savings but doesn't factor into this particular credit calculation.

I used TaxAct last year for my Saver's Credit and it calculated everything correctly. Just make sure you enter your contributions accurately and answer all the questions. The software should handle the income phaseouts and percentages correctly.

Thanks, this is super helpful. So if I understand correctly - transferring to Robinhood isn't taxable, but I need to make sure I have documentation ready for my cost basis when I do sell, since Robinhood won't have that info? Would it make more sense to sell on my current exchanges where at least some transaction history exists, rather than moving to Robinhood first?

That's exactly right - transferring isn't taxable, but you need to document your cost basis for when you do sell, since Robinhood won't have that information. As for whether to sell on current exchanges versus transferring to Robinhood first, that's a great question. There's a potential advantage to selling on exchanges where you have some transaction history, as you could potentially have more documentation to support your reported cost basis. However, if those are foreign exchanges, they might not issue U.S. tax forms, which could create other complications. If your current exchanges can provide transaction history reports that show your purchases, that documentation could be valuable regardless of where you ultimately sell. The key is having a defensible way to calculate and document your gains.

Is that true even for transactions that happened before they became a permanent resident? I thought you only had to worry about US taxes once you actually became a resident.