Hi Tax Experts,
I appreciate your help and suggestions! I have some questions about the 1042-S form.
Both my husband and I are international students receiving W-2 income forms. We are being taxed for resident purposes since we have lived in this country for more than five years. This is the first year we are filing jointly, and I completed our tax return on February 05, however, we are so surprised to receive a 1042-S form (his form) with exception code 16 today.
I have done my online search, seeing people suggesting amendments on Turbotax; reporting gross income under other income, and reporting withholding tax under other income tax paid. However, I highly doubt whether it was the right way because before I filled in the 1042-S information, we were supported to get about a $4000 federal refund, after I put in the income and paid tax as instructed on the 1042-S, it showed that we would only get less than $200 federal refund. How come a gross income of about $8000 with a $1200 federal tax withholding makes such a huge difference in tax refund amount? With this doubt, I discontinued this amendment.
Then, I searched online again and I saw some answers such as if it is a scholarship or fellowship with exception code 16, they could be nontaxable depending on the types of use, therefore, these amounts on 1042-S do not necessarily need to be reported. Meanwhile, I also saw some suggestions like reporting the gross income in a negative number. In addition, I also saw some suggestions to report under education. (My husband did not receive a 1098-T, but I received a 1098-T and had reported it for education credits).
I am very confused at this point. I appreciate all the professional insights. I want to report taxes correctly since I do not want to be fined in the future. But if I can leave things like this, that would be awesome.
I would like to hear your opinion.
Thank you soooooo much!
