This is really helpful! I'm in almost the exact same situation and was panicking about having to track down receipts from years ago for random stuff I sold. Your category approach makes so much sense - I can definitely estimate what I originally paid for broad groups of items rather than trying to remember every single purchase. Quick question though - when you say you reported the gains separately for items you profited on, did you have to treat those as regular income or capital gains? And do you remember roughly how long the H&R Block process took once you had your summary ready?

@Alexis Renard For personal items that you profited on, those are typically treated as ordinary income, not capital gains since (they weren t'held as investments .)The H&R Block software walked me through this - it was actually pretty straightforward once I had my summary prepared. The whole process took me maybe 30-45 minutes once I had my categories and estimates ready. The longest part was honestly just creating that initial summary spreadsheet, but even that only took about an hour since I didn t'need to be super precise with every item. One tip: if you sold any items for significantly more than you paid like (a collectible that appreciated ,)you might want to double-check whether those should be treated differently. But for most regular personal items sold at small profits, it s'just regular income on your 1040. The peace of mind was totally worth the effort - much better than ignoring the 1099-K and potentially getting a letter from the IRS later!

This is exactly the kind of practical advice I was hoping to find! I've been stressing about this for weeks thinking I'd need to recreate every single transaction. Your grouping approach makes so much sense - I can definitely estimate what I originally paid for categories like "old video games," "unused kitchen gadgets," etc. Quick follow-up question: when you say you used the 1099-K reconciliation section in TaxAct, did it automatically calculate that there was no taxable income once you showed the items were sold at a loss? I'm wondering if H&R Block's system works similarly where it basically zeroes out the 1099-K amount when you demonstrate higher original costs. Also really appreciate you mentioning it only took about an hour once you stopped overthinking - I've been procrastinating on this for way too long because it seemed impossible!

This is exactly the guidance I needed! I'm in my third year in the US and definitely meet the substantial presence test, but my university's international office has been giving me conflicting advice about my tax status. It's reassuring to know that the IRS rules determine my status, not what forms the university issues. The education credits tip is really valuable - I hadn't even considered that I might be eligible for those on top of getting back the incorrectly withheld taxes. Between the excess withholding refund and potential education credits, this could make a significant difference in my tax situation. One follow-up question: when you mention the 12-22% range for residents versus the 30% nonresident withholding, is that just federal taxes or does that include state taxes too? I'm trying to estimate how much I should expect back from this correction.

The 12-22% range I mentioned is just for federal income taxes - state taxes would be separate and depend on which state you're in. Some states don't tax fellowship income at all, while others treat it the same as regular income. The 30% withholding on your 1042S was likely only federal withholding too (check Box 7 on your form), so your refund calculation should focus on the federal portion. If your university also withheld state taxes incorrectly, that would show up separately on your 1042S and you'd handle that on your state return. For estimating your refund, take the amount in Box 7 of your 1042S and subtract what you would actually owe in federal taxes on that fellowship income based on your total income and tax bracket. The difference is roughly what you should get back, plus any education credits you qualify for. Since you're in your third year and clearly established as a resident, you should definitely be taking advantage of education credits if you haven't been claiming them. The American Opportunity Credit alone can be worth up to $2,500 per year for the first four years of undergraduate study.

@Hattie Carson Great question about timing! When I got my first-time penalty abatement approved, the IRS agent told me right on the call that it was approved and gave me a confirmation number. She said the system would be updated within 2-3 business days, so there s'no risk of accidentally paying while waiting. For the W-4 adjustment, I d'definitely recommend doing it sooner rather than later! The IRS agent actually walked me through this too. You want to get more withheld from each paycheck starting now so you re'covered for the full year. If you wait until later in the year, you d'need even bigger withholding increases to make up for the missed months. The IRS has a withholding calculator on their website irs.gov (that) s'really helpful for figuring out exactly how much extra to withhold. I used it and increased my withholding by about $50 per paycheck, which should easily prevent this issue next year. Better safe than sorry!

This is excellent advice about documentation! I'm actually dealing with my first S-corp amendment case and hadn't thought about the affidavit approach. That makes a lot of sense to have something in writing from the client confirming their intent. Quick question about the supporting documentation - when you mention bank account opening dates and first transactions, are you suggesting to include copies of these with the corrected 2553 submission, or just keep them on file in case the IRS requests them later? I don't want to overwhelm them with paperwork, but I also want to be thorough. Also, do you have any specific language you typically use for that client affidavit, or is it pretty straightforward? I want to make sure I get the wording right the first time.

For the supporting documentation, I typically keep everything on file but don't submit it with the initial corrected 2553 unless specifically requested. The IRS prefers a clean submission initially - just the corrected form, explanation letter, and maybe the client affidavit if you want to include it upfront. For the affidavit language, I keep it simple: "I [client name], as [title] of [company name], hereby affirm that the incorrect effective date listed on the original Form 2553 filed on [date] was an inadvertent error. It was always my intention to elect S-corporation status effective [correct date], which was the date business operations commenced. This correction is not being made for tax avoidance purposes but solely to accurately reflect the intended election date." Having the bank records, articles of incorporation, and early business activity documentation ready to go gives you confidence when writing your explanation letter, and you can reference their existence without actually including copies unless asked.

This is really helpful advice about timing the submission strategically! I hadn't considered the seasonal processing delays at the IRS. As someone new to handling S-corp elections, I'm learning there are so many nuances beyond just filling out the form correctly. Your point about being precise with dates is spot on. I've been guilty of using vague language like "approximately" in my explanation letters, but you're right that exact dates probably make the IRS reviewer's job easier and reduce the chance of follow-up requests. One question - when you mention avoiding peak filing season, does this apply even for business entity forms like the 2553, or is that advice more relevant for individual tax matters? I would think business entity processing might be on a different timeline, but I'm not sure how integrated their processing systems are. Thanks for sharing your experience - it's exactly this kind of practical insight that helps newer practitioners avoid common pitfalls!

Great question about business entity processing! While the IRS does have separate units for business entities versus individual returns, the reality is that many of the same personnel and resources get pulled into individual return processing during peak season. I've definitely noticed slower response times on business entity matters from February through May. The business entity processing centers in Cincinnati and Ogden seem to maintain more consistent staffing year-round compared to individual processing, but there's still some impact. Plus, if you need to call for any follow-up questions, those phone lines get absolutely swamped during filing season regardless of whether you're calling about business or individual matters. My rule of thumb is: if it's not urgent and you have flexibility on timing, submit business entity corrections in June through December for the fastest processing. But don't delay if you're approaching any important deadlines - a slower processing time is still better than missing a deadline entirely! The exact date advice really does make a difference. I started doing this after getting several requests for "clarification of timeline" that added 4-6 weeks to processing. Now I rarely get those follow-ups.

I just joined this community after finding this thread through a Google search - I'm dealing with the exact same situation! Filed my 1040-NR on February 26th and got the delayed processing message two days ago. My transcript also shows code 570 with no 971 notice, and I was honestly starting to freak out thinking I'd made some critical mistake on my return. Reading through everyone's experiences here has been such a lifesaver - it's clear that this is just the standard additional verification process the IRS uses for all non-resident returns rather than anything being wrong with our paperwork. I've been obsessively checking WMR probably 6-7 times a day (definitely not good for my mental health!), but seeing the consistent 6-8 week timeline from literally everyone here helps me set realistic expectations and stop panicking. I'm absolutely going to follow the community wisdom and switch to weekly transcript checks instead of driving myself crazy with constant WMR refreshing. This discussion has been more informative and reassuring than weeks of trying to decode the IRS website - thank you everyone for sharing your experiences and making this stressful process feel completely normal! It's such a relief to know we're all going through the identical verification process together.

I'm also going through this exact same situation! Just filed my 1040-NR on March 2nd and got the delayed processing message yesterday. My transcript shows code 570 as well, and I was really starting to worry until I found this amazing thread. It's such a huge relief to see that literally every single non-resident filer here is experiencing the identical process - clearly this is just the standard additional verification the IRS uses for our international returns rather than anything being wrong with our paperwork. I've been obsessively checking WMR multiple times daily (probably way more than healthy!), but seeing everyone's consistent 6-8 week timeline really helps me set realistic expectations and stop panicking. I'm definitely going to switch to the weekly transcript check approach that everyone here recommends instead of driving myself crazy with constant WMR refreshing. This community discussion has been so much more informative than anything I could find on the IRS website - thank you everyone for sharing your experiences and making this uncertain waiting period feel completely normal! It's incredible to know we're all going through the same verification process together.