How is a relocation fee of more than 40k taxed?
It is ordinary income to you. You should probably talk to a California licensed CRTP/EA/CPA, but I doubt they'll say anything different. You would probably ask them whether you can treat some of it as a refund of rent paid, but I personally wouldn't feel comfortable with that. With a $40,000 payment there is a 100% chance that the owner will be claiming this as a business expense on their taxes.  The IRS and the state will definitely know about it, and the risk of interest and penalties if it is not claimed as income make the best course of action to see a tax adviser. Because taxes will not be taken out by the property owner, the tax payer should also make sure that the estimated $10,000 in federal taxes, if they are in the 25% tax bracket, doesn't trigger other tax issues that could result in penalties, or the need to file quarterly taxes next year. This kind of extra income could also result in a change or an elimination of a health care subsidy. A unexpected mid-year  change could trigger the need to refund the subsidy received this year via the tax form next April.
Didn't see it mentioned so far, but depending on modified AGI you may be prevented from a tax deduction for your contribution to a Traditional IRA if you or your spouse are offered a retirement plan at work, even if you don't participate in it.  See the IRS page here for the details of deduction limitability: https://www.irs.gov/retirement-plans/2017-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-covered-by-a-retirement-plan-at-work In my opinion, because I heavily favor all the benefits of the Roth, I'd contribute first to a Roth IRA and then to the Roth 401(k).   The former first because it puts the money in a place where you have more control over fees and how it is invested.   The latter because the contribution limits are much higher than the IRA, and the money grows tax-free and incurs no taxes on withdrawal. take a look at this graph here: http://mortgagevista.com/#m=1&a=40000&b=4&c=30y&B&oa&ob&oc&od It shows how much it costs to borrow $40k for 30 years. You did not post your mortgage rate or loan term, so I used 4% over 30 years (you can easily update this with your actual details). While this does not show the costs of your total mortgage, it does help you get an idea of just how much the 40k$ in question is costing you in interest. If you hover over the month one year from now you will see that you will have paid around $1587 in interest over the course of the year. If you were to put the full 40k$ toward your mortgage right now, you would avoid having to pay this interest over the next year.  The next question I think you would have to ask yourself is if there is anything else you could do with that money that is worth more than the $1587 to you.  Is it worth $1587 to keep those funds liquid/available in case you need to use them for something else? Could you find other investments you feel comfortable with that could earn you more than $1587?  Is it worth the hassle/risk of investing the funds somewhere else with a better return? If you can't come up with anything better to do with the money then yes, you should probably use the funds (or at least part of them) towards the mortgage. "The number one rule of thumb that will generally answer the ""is it taxable"" question for any money you may have or receive: ""Did you pay taxes on it already?"". Pretty much any money you actually get in your paycheck/DD has already been taxed (or at least the projected amount of tax has been withheld) is your money, to dispense with as you will (or according to your pre-arranged obligations, for most of it). Deposits paid are one such example; if you wrote a check or obtained a money order that they then cashed, that's still your money until it isn't; the contract states that it is being held effectively in escrow (though the landlord has free use of it so long as he can pony up according to the contract). Anything not used to pay for damages is yours, and you get it back. The ATM fee refund is trickier, but basically this is a benefit offered to you as a service by your bank. You front for the ATM fees incurred when withdrawing, and then those fees are refunded to you by your bank (effectively increasing the number of ATMs you can withdraw from ""for free""). As long as there is no net income, it's treated like a mail-in rebate; you didn't gain any money, so there's nothing new to tax. There are a couple of specific exceptions to this otherwise overarching rule of thumb. One is Roth IRAs. Typically, on investments, you either pay income tax on the money going in and capital gains tax on the money coming out, or you pay nothing going in and income tax coming out. With a Roth, however, you pay income tax going in and nothing coming out, even though you're (eventually) getting back more than you put in.  Another is gifts. Whoever gave you the gift paid the taxes on it (or the money to buy it). However, if they give you a gift valued more than a certain limit (changes every year, and there's a lifetime limit), they have to pay an additional gift tax of 35% on any amount over the limit. That's taxing taxed income (usually).  There are other examples, but for the overwhelming majority of situations, if it's money you already had after any and all applicable taxes, it's not taxable even if you haven't seen that money for a while." Its not H1-B visa, its the L1 Visa. L1 Visa have no minimum wage and people working on L1 can get Green Card faster. Some guys I know make around 40k/year in Silicon Valley @ Apple.   H1-B scare is little bit overhyped in comparison to L1 visa. Anyway, people dont do their research and believe only these news channel say. H1-B is really helping US, atleast 60-65% are useful. Even if you a person is hired by H1-B, company has to invest more in HR and lawyer fees as a company by itself would not be able to apply. L1 Visa on other hand has no limit on salary so you can keep a worker at a drastically low rate which would for sure increase your profits. There are no year limit on L1. While H1-B have a max limit of 6 years. (Source: my collegues and USCIS website). Let me know if anything is wrong here .. still researching on this.. In the US, mortgage payments are not deductible. What is deductible is the mortgage interest (to a limit). That, as well, is not deductible unconditionally, but rather as part of your itemized deductions on Schedule A of your yearly tax return. So if you're married and have a standard deduction of $12600 a year, live in a state with no state income tax, and your property tax and the mortgage interest are less than your standard deduction - you will not be getting any tax benefit whatsoever. That is, in fact, the case for many, if not majority, of the US mortgage payers. So in order to get a proper estimate, you need to take into account all the aspects of your tax calculations, which are by nature quite personal, and simulate the changes with the mortgage interest deduction. Most tax preparation software will allow you creating multiple files, so you can run the numbers for different scenarios. I'm not a fan of spending time negotiating prices within the company; that's just a waste of time, but I think assigning costs appropriately is important to evaluating the segment or department performance.  If the internal sales are done across borders there are tax impacts and you are required to charge a market rate.  Transfer pricing is a hot topic within the accounting industry Typically tax treaties will cover double taxation (taxes paid in one jurisdiction are deducted in the other jurisdiction so there is no double tax). You'll need an accountant and attorney with experience in international business setups to confirm and determine which jurisdiction gets first priority of tax payment.  In short, this is the wrong place to get a good answer. Talk to (and pay for) professionals to get you properly set up. Many states have a simple method for assessing income tax on nonresidents.  If you have $X income in State A where you claim nonresident status and  $Y income overall, then you owe State A a fraction (X/Y) of the income  tax that would have been due on $Y income had you been a resident of State A.  In other words, compute the state income tax on $Y as per State A rules, and send us (X/Y) of that amount.  If you are a resident of State B, then State B  will tax you on $Y but give you some credit for taxes paid to State A. Thus, you might be required to file a State A income tax return regardless of how small $X is.  As a practical matter, many commercial real-estate  investments are set up as limited partnerships in which most of the annual taxable income is a small amount of portfolio income (usually interest income that you report on Schedule B of Form 1040), and the annual  bottom line is lots of passive losses which the limited partners report (but do not get to deduct) on the Federal return.  As a result, State A is unlikely to come after you for the tax on, say, $100 of interest income each year because it will cost them more to go after you than they will  recover from you. But, when the real estate is sold, there will (hopefully) be a big capital gain, most of which  will be sheltered from Federal tax since the passive losses finally get  to be deducted.  At this point, State A is not only owed a lot of money (it knows nothing of your passive losses etc) but, after it processes the income tax return that you filed for that year, it will likely demand that you file income tax returns for previous years as well.