How do you figure out if there's a tax treaty benefit for your country? Is this something standard tax software will catch or do you need a specialist?

Standard tax software like TurboTax and H&R Block will ask questions about your citizenship and residency status, then apply any relevant tax treaty benefits automatically. The software will prompt you to identify your country of citizenship, and it has the treaty information built in. However, if you want to check yourself before filing, you can look up tax treaties on the IRS website - Publication 901 "U.S. Tax Treaties" lists all current treaties and explains the specific benefits. Common benefits include reduced taxation on certain types of income or special rules for students, teachers, and researchers. The treaty articles can be a bit technical to read, but the overview tables in Publication 901 make it fairly straightforward to see if any benefits might apply to your situation.

Which software did you end up using that worked well with the ITIN situation? I'm trying to decide between a few options.

I have something called "OASDI" on mine. Is that the same as SS?

Yes, OASDI stands for "Old Age, Survivors, and Disability Insurance" which is the official name for Social Security. It's exactly the same as the SS deduction, just a different abbreviation some payroll systems use.

Overtime itself isn't taxed higher, but payroll systems often calculate withholding as if your higher paycheck is your new normal salary. So if you made $1000 extra from overtime, the system thinks "oh this person now makes $X more annually" and withholds at the higher rate that would apply. You'll get the excess back when you file taxes, but it definitely feels like overtime gets taxed more in the moment!

Thanks for this insight! Quick question - do student loans factor into this calculation at all? My daughter has both scholarships and loans.

Student loans don't impact the taxability of scholarships. Loans are simply money you have to pay back, so they're not considered income. The calculation only looks at: 1) How much in qualified education expenses did you have? and 2) How much in scholarships/grants (money you don't have to repay) did you receive? If #2 is larger than #1, the difference is taxable income. Loans are completely separate from this calculation. However, you may be eligible for the student loan interest deduction for interest paid on those loans, which is a different tax benefit entirely.

How did they even catch such a small amount? Was it just random bad luck that you got audited or do they actually check everyone's forms that carefully?

Does H&R Block handle the capital gains calculation correctly? My situation is complicated because some of my RSUs vested early in the year and then I sold them months later when the price had changed quite a bit. I need to make sure I'm reporting both the initial income and the capital gains/losses correctly.

Yes, H&R Block handles the capital gains calculation correctly. It separates the initial income recognition (which appears on your W-2) from any subsequent capital gains or losses that occur between vesting and selling. When you enter your stock sales, you'll provide both the sale price and the cost basis (which is the fair market value on the vesting date). The software then correctly calculates only the difference as capital gains/losses. It's much more straightforward than TurboTax, especially for situations where there's a significant time gap between vesting and selling with price changes.

Form 3922 is for ESPP (Employee Stock Purchase Plans), not RSUs. For RSUs, employers typically provide a summary statement but not a specific IRS form. Most just include it on your W-2 and provide supplemental information.

Thanks for this clarification! So if I understand correctly: I should definitely file Schedule C with my business expenses to reduce my self-employment tax, but that's completely separate from deciding between itemized vs. standard deduction? And since my total income is only around $32,500, the standard deduction ($13,850) is probably better unless I have some major itemized deductions?

Yes, that's exactly right! File Schedule C to report your 1099 income and expenses (which reduces or eliminates self-employment tax on that income). And yes, at your income level, you'll almost certainly want to take the standard deduction unless you have extraordinary itemized deductions like major medical expenses, huge charitable contributions, or large mortgage interest payments. For most people in your situation, itemized deductions don't exceed the $13,850 standard deduction.

Just be careful with the home office deduction - it has to be a space EXCLUSIVELY used for business. If you sometimes use that desk/room for anything personal, it doesn't qualify. I got audited over this once.