As a tax professional who has handled numerous estate returns, I wanted to add some practical guidance that might help streamline your filing process. Your approach is solid overall - choosing calendar year for a combined initial/final 1041 is definitely the right call, and having the estate pay taxes directly rather than issuing K-1s will simplify things considerably for your situation. One area I'd like to emphasize that's been touched on but bears repeating: the stepped-up basis verification is absolutely crucial. I've seen countless cases where brokerages initially report the decedent's original cost basis instead of the fair market value at death. With your $3,800 in 1099-B gains, ensuring proper stepped-up basis could potentially reduce your taxable gains significantly. Regarding estimated payments, with roughly $7,900 in total estate income, you're likely looking at $1,400-1,700 in federal taxes due to estate tax brackets. I'd recommend making an estimated payment soon to avoid underpayment penalties, especially since estates don't qualify for prior-year safe harbor provisions. Also, don't forget to maximize your estate administration deductions. Court fees, attorney costs, and even expenses like certified mail and appraisal fees can help offset your tax liability. Keep detailed receipts for everything related to estate administration. One final tip: before checking that "final return" box on the 1041, triple-check that every single account is closed and all assets distributed. I've seen cases where executors discovered forgotten accounts months later, which can create complications with the IRS when they've already filed a final return.

As someone who recently completed a similar estate tax filing process, I wanted to share a few additional considerations that might be helpful for your situation. First, regarding your question about calendar vs fiscal year - definitely go with calendar year since you're filing both initial and final returns. This will keep everything aligned with standard tax practices and make TurboTax Business much easier to navigate. One thing I discovered during my process that saved considerable time: before starting your 1041 in TurboTax, create a simple checklist of all the key information you'll need. This includes the exact probate opening date, when letters testamentary were issued, the estate EIN, and beneficiary information. Having this organized upfront made the software interview process much smoother. Also, I'd strongly echo what others have mentioned about verifying the stepped-up basis on your 1099-B. In my case, the brokerage had used my father's original purchase prices instead of the fair market value at death, which would have resulted in overpaying taxes by nearly $1,800. It's worth taking the time to verify this before proceeding with any tax calculations. One practical tip for TurboTax Business: when you get to the section about entity type, make sure to select "Estate" rather than any of the business entity options. The software will then guide you through estate-specific questions, including whether this is a final return. With your estimated $7,900 in gains, you're probably looking at around $1,500 in federal taxes, so consider making an estimated payment to avoid penalties. Good luck with the process - it sounds like you're well-prepared and asking all the right questions!

The 12% to 22% jump definitely feels steep when you first encounter it! I think what helped me wrap my head around it was learning that this structure is actually the result of decades of tax policy evolution, not some arbitrary decision to penalize the middle class. One thing that really clicked for me was understanding that before the 2017 Tax Cuts and Jobs Act, we actually had MORE brackets with different percentages. The current system consolidated what used to be a 15% bracket jumping to 25% - so while 12% to 22% still feels like a big leap, it's actually an improvement for most middle-income families compared to the old 15% to 25% jump. What I found most helpful was using the IRS's own tax withholding calculator to see how this plays out with real numbers. When you plug in your actual income and see the bracket-by-bracket breakdown, it becomes much clearer that you're not paying 22% on your entire income - just on the portion above the threshold. The system definitely has its quirks, but understanding that it's progressive (not a cliff) and that your effective rate is always lower than your marginal rate made it feel much less intimidating. Plus, as others have mentioned, it creates some nice opportunities for strategic retirement contributions and other tax-advantaged moves.

This thread has been incredibly enlightening! As someone who just hit that 22% bracket for the first time this year, I was genuinely worried I was doing something wrong financially. The jump from 12% to 22% felt like such a penalty for earning a bit more money. What really helped me was everyone's explanations about marginal vs. effective tax rates. I went back and calculated my actual effective rate and realized it's only around 16% - way less scary than that 22% number that was stressing me out! I'm also now motivated to look into maxing out my 401k contributions to potentially keep some income in that 12% bracket. It's amazing how understanding the system better makes it feel less like something that's happening TO you and more like something you can actually plan around. Thanks to everyone who shared their insights and tools - this is exactly the kind of real-world explanation that makes tax policy actually understandable for regular folks like me!

Just wanted to share my recent experience with the W-7 process since I see a lot of helpful advice here! My husband needed an ITIN and we were really stressed about the whole thing. We ended up going the TAC route that Anastasia mentioned - definitely call ahead because they're booking appointments weeks out. The agent there was super helpful and caught a mistake we would have made on the form (we almost checked the wrong box for his reason code). One thing I didn't see mentioned - if your spouse has any previous U.S. tax history or SSN applications that were denied, make sure to bring documentation of that. The IRS agent told us it helps speed up their background verification process. The whole appointment took about 45 minutes, and we walked out knowing our application was complete and correct. Got the ITIN in about 6 weeks. Way less stressful than wondering if we mailed the right stuff!

I went through this exact situation two years ago when I got married to someone who needed an ITIN. The confusion around the W-7 form is totally understandable - the instructions are written in classic IRS bureaucrat-speak! Here's what worked for us: We filed "Married Filing Jointly" and attached the W-7 form directly with our tax return. You'll need to write "ITIN TO BE REQUESTED" in the space where her SSN would go on your 1040. A few key things that helped us avoid delays: - Make absolutely sure you check box "e" on the W-7 (spouse of US citizen/resident), NOT box "d" - Include a copy of your marriage certificate as supporting documentation - If mailing, use certified mail with tracking - these documents are too important to send regular mail The processing time was about 9 weeks for us, but we got both our tax refund and the ITIN. You can definitely file your taxes while the ITIN application is pending - just be prepared for the longer processing time. Good luck! Tax season stress with immigration paperwork is no joke, but you've got this!

Hey Aliyah! Welcome to the world of doing your own taxes - you're definitely not alone in feeling confused by all the different screens and options! Just to reinforce what others have said, the Federal carryover worksheet is 100% something you can skip as a first-time filer. It's basically TurboTax's way of asking "do you have any unfinished tax business from previous years?" Since you've never filed before, the answer is automatically no. One tip for navigating TurboTax as a first-timer: don't stress about every single screen or option they show you. The software is designed to cover every possible tax situation, so it'll present you with sections that might not apply to your simple W-2 situation. When in doubt, if you don't have the specific documents or situations they're asking about, you can usually skip those sections safely. You're doing great by being careful and asking questions! The fact that you're taking your time to understand each step will serve you well. Good luck with the rest of your return!

Hey Aliyah! Just wanted to chime in as someone who also filed for the first time recently - you're absolutely on the right track by asking questions and being careful! Everyone else has given you great advice about the carryover worksheet, but I wanted to add one more reassuring point: TurboTax is actually pretty good at guiding you through what you need vs. what you can skip. Since you mentioned you're being super careful not to mess anything up, here's a helpful mindset that worked for me: if a section is asking for information from "last year's return" or "previous tax years" and you've never filed before, you can confidently skip it. The software will never penalize you for not having information that doesn't exist! You've got this - the hardest part is honestly just getting started, and you're already doing great by working through it step by step. Once you get through your first return, next year will feel like a breeze in comparison!

Reading through all these experiences has been sobering. I came here initially skeptical but open-minded about creative tax strategies, but the consistent pattern of audit failures and financial consequences is impossible to ignore. What strikes me most is how these schemes prey on people's desire to minimize taxes through what appears to be "sophisticated" planning. The volcanic ash arrangement has all the classic red flags: inflated valuations, promoters focused on tax benefits rather than economic returns, and the fundamental question of why anyone would donate something rather than sell it at the claimed fair market value. I'm particularly grateful for the insights from tax professionals who've seen these cases play out over years. The extended audit timeline, compounding penalties and interest, and the reality that promoters disappear when the IRS comes calling paint a clear picture of why these arrangements are so risky. For anyone considering similar schemes, the advice here is unanimous: legitimate tax planning should make economic sense independent of tax benefits. If the primary selling point is the tax deduction rather than the underlying investment merit, that's your red flag to walk away. I'll be sticking with conventional retirement contributions, legitimate business deductions, and actual charitable giving to causes I care about. Sometimes the boring approach really is the wise approach when it comes to taxes.

I've been lurking in this community for a while but felt compelled to create an account just to add my voice to this discussion. As a forensic accountant who's worked on several IRS enforcement cases involving these exact types of schemes, I can confirm everything that's been shared here is spot-on. The volcanic ash arrangement you're describing follows the same playbook I've seen in conservation easements, artwork donations, and patent charity schemes. The IRS has become incredibly sophisticated at identifying these patterns - they use data mining to flag returns with similar charitable deduction amounts, asset types, and even common promoter language in supporting documentation. What many people don't realize is that when the IRS audits these arrangements, they don't just look at your individual return. They audit the entire syndicate - sometimes hundreds of taxpayers who participated in the same scheme. This creates a massive database of evidence that makes it nearly impossible for anyone to successfully defend the deductions. I've personally worked on cases where the penalties and interest exceeded the original tax "savings" by 3:1 ratios. The financial and emotional toll on families is devastating, especially when they realize the promoters have structured their businesses to be judgment-proof when the inevitable lawsuits start flying. Trust your gut on this one - if it sounds too good to be true, it absolutely is. The IRS didn't get fooled by these schemes when they were new, and they certainly won't now that they've had years to perfect their enforcement strategies.