Pro tip: if you want less tax withheld from your bonus, increase your 401k contribution just for that paycheck if your company allows it. I put 50% of my bonus straight into 401k last year and it lowered my taxable income. Double win!

This is actually a really important point! My bonus pushed me into a higher tax bracket last year because it came in December. If it had come in January, my tax situation would have been completely different. Timing matters!

Is Publication 901 updated for 2024 yet? I checked a few weeks ago and they still had the 2023 version online. Also, do you know if non-residents can claim education credits like the American Opportunity Credit? I took some classes last year.

You're right that the official IRS website still has the 2023 version, but they don't typically update Publication 901 every year - only when treaty provisions change significantly. The 2023 version should still be applicable for most countries for your 2024 taxes. For education credits, non-resident aliens generally cannot claim the American Opportunity Credit. However, if you're from certain countries with specific education provisions in their tax treaties (like China, India, or several European countries), you might qualify for different education-related benefits. You'll need to check the specific article in your country's treaty that addresses students or education expenses.

Yes, you can e-file a 1040NR but not with every software. I used OLT.com (OnLine Taxes) last year and was able to e-file my non-resident return. Sprintax also supports e-filing for 1040NR. Most free options don't support it though.

What exactly is the carried interest loophole? I hear about it but don't really understand how it works or why it's such a big deal.

Carried interest is basically the share of profits that hedge fund and private equity managers get as compensation for managing investments. Instead of being taxed as ordinary income (which can be up to 37%), it's taxed at the capital gains rate (usually 20%). So imagine a fund manager who makes $10 million from managing other people's money. Instead of paying $3.7 million in taxes like other high-earning professionals would, they might only pay $2 million. That's a $1.7 million tax break just because of how their compensation is classified! Meanwhile teachers, doctors, and engineers all pay the higher ordinary income rates on their earnings.

That would totally screw over people in high cost of living areas though. $500k won't even buy you a 1 bedroom condo in San Francisco or NYC. Not everyone with a mortgage over $500k is wealthy - many are middle class families in expensive metro areas.

What's the current threshold for the 1099-K? I thought they pushed it back to $20,000 and 200 transactions again for 2023 taxes? Has that changed for 2024 filing?

For 2023 tax returns (filing in 2024), the threshold was kept at $20,000 and 200 transactions after the IRS delayed the lower threshold. But for 2024 transactions (filing in 2025), it's currently set at $5,000, though this could change again. The important thing to remember is that receiving a 1099-K doesn't automatically mean you owe taxes on that amount. It's just reporting money that moved through your account using payment methods that weren't marked as friends and family. Your actual tax liability depends on whether those payments represent income or not.

I used TurboTax last year for a similar situation. It works fine but you have to be careful where you enter it. Don't just follow their automated guidance when they ask about 1099-Ks. Instead, you'll want to manually add it as "Other Income" on Schedule 1 and then provide the explanation that these were loan repayments.

Thanks for this info! I was worried I'd need to spend money on a tax professional, but sounds like TurboTax can handle it if I'm careful about where I enter the information. That's exactly what I needed to know - I'll make sure to enter it manually as "Other Income" rather than letting their automatic system categorize it as business income. Appreciate the help!

How exactly does depreciation work with rental properties? I've heard you HAVE to take it even if you don't want to - is that true?

Yes, you absolutely must take depreciation on rental properties whether you want to or not. The IRS considers it "allowed or allowable" which means even if you don't claim it, they'll act as if you did when you sell the property. Residential rental properties are typically depreciated over 27.5 years (straight-line method). You can only depreciate the building value, not the land value, so you'll need a reasonable allocation between the two. Most county tax assessments separate these values, which is an acceptable method for determining the split. If you've never taken depreciation but should have, you generally need to file a Form 3115 to correct this. Not claiming depreciation can create a mess when you sell, as the IRS will reduce your basis by the depreciation you should have taken, potentially creating a larger gain.

But with 650k income no amount of contributions would get them below 150k threshold right? I mean you can only put like 22k in 401k per person.