Good point about the relocation package. Some companies will also cover the realtor fees and closing costs if the move is at their request rather than yours. OP should definitely check if there's a formal relocation policy or if they're willing to negotiate something since this is a second move in such a short time.

Absolutely right about negotiating, especially for a second move! When I mentioned the potential tax hit to my manager, they ended up covering not only the realtor fees but also some of the closing costs too. Many companies don't advertise their full relocation benefits, but they often have flexibility for valuable employees, especially in cases like this where it's a second move in a short timeframe. It never hurts to ask, and sometimes just bringing up the tax and real estate cost implications is enough to get them to offer additional assistance.

This is super helpful! I did put about $23k into a bathroom renovation shortly after moving in. Would that count as a capital improvement that increases my basis? And what about closing costs - which ones can be included?

Yes, the bathroom renovation would definitely count as a capital improvement that increases your basis! Capital improvements are anything that adds value to your home, prolongs its useful life, or adapts it to new uses. For closing costs, you can generally include things like title insurance, legal fees, recording fees, survey costs, transfer taxes, and any owner's title insurance. You can't include items like mortgage insurance, loan assumption fees, or costs of getting a mortgage (points, credit reports, etc.). With your $23k bathroom renovation plus eligible closing costs, you could easily add $30k+ to your basis, which would significantly reduce any potential taxable gain, even before applying the partial exclusion for a work-related move.

Do improvements to common areas count if you're just renting a room? Like if I renovated the kitchen that we both use?

Yes, they can count proportionally! If you renovate a shared kitchen and rent out 1 bedroom in a 3-bedroom house, you might be able to deduct about 1/3 of those kitchen renovation costs against your rental income. The key is documenting everything clearly and breaking down how much square footage the tenant has exclusive use of versus shared spaces. Take photos of all renovations too! My accountant had me create a simple floor plan showing the dedicated rental space versus common areas to help with the calculations.

But you can only deduct that if your employer doesn't reimburse you and you're using it exclusively for work, right? I work from home sometimes but also use my internet for Netflix lol

Thanks for mentioning this! I just checked and I did see something about education credits in my tax software that might have been wrong. Would claiming incorrect credits cause me to owe more or less though? I'm confused about why this would make my tax bill higher.

If you're seeing a high tax bill, it's likely NOT because you claimed education credits incorrectly - those would actually reduce your tax liability improperly. It's more likely that your tax bill is high because you're not getting the standard deduction that US residents get, and your withholding was too low throughout the year. But it's still important to make sure you're not claiming credits you're not eligible for, as that could trigger an audit later, even if it temporarily shows a lower tax bill. The correct approach is to make sure you're filing as a nonresident alien (Form 1040-NR), checking for tax treaty benefits from your home country, and making sure you're not claiming deductions or credits that only residents can claim.

Not OP but this is helpful. I'm from Brazil on F1 and always confused about state taxes. Does anyone know if Texas has any special provisions for international students? My university says I don't need to file state taxes but I'm worried that's not right.

Wait, I'm confused about ministers. My husband is a youth pastor with a W-2, but the church takes out income tax AND social security/medicare. Does he still need to pay self-employment tax?

For your husband's situation, it depends on whether he's officially ordained, licensed, or commissioned as a minister. If he is, then the church shouldn't be withholding Social Security and Medicare - ministers are exempt from FICA withholding and must pay self-employment tax regardless of W-2 status. If your husband is not officially considered a minister for tax purposes but just a regular church employee, and the church is withholding FICA taxes, then he files like a normal employee and doesn't need to pay self-employment tax.

Regular church employees cannot opt out of Social Security taxes. The exemption you're thinking of only applies to ministers, members of religious orders, and Christian Science practitioners who file Form 4361 for exemption based on religious opposition to public insurance. To qualify, they must be conscientiously opposed to receiving public insurance benefits and must belong to a religious organization that provides care for its dependent members.

For the education credits, if I'm claiming my daughter as a dependent, do I have to be the one who claims the education credit even if she paid some of her tuition herself from her 529 plan?

Yes, if you claim your daughter as a dependent, you're the only one who can claim the education credits for her - even if she paid some expenses herself. The person who claims the dependent gets the education credits, period. However, for 529 plan withdrawals, they need to be coordinated with education credits. You can't claim expenses paid with tax-free 529 funds for the education credit (that would be double-dipping). So you'd want to document which portion of the tuition was paid from taxable funds versus 529 funds.

What counts as "support" exactly? Does paying for their phone bill and car insurance count? What about if my son uses student loans to pay for his housing?