This thread has been incredibly helpful! I'm dealing with the exact same situation - got a 1099-DIV with capital gain distributions in box 2A even though I never sold anything. It's reassuring to know this is totally normal and that I'm not missing something obvious. One thing I wanted to add for anyone else reading this: make sure you keep good records of these distributions, especially if you're reinvesting them automatically. Your brokerage should track your cost basis automatically now (they're required to), but it's still smart to keep your own records. When you do eventually sell years down the road, you'll want to make sure you're getting credit for all the taxes you paid along the way through these distributions. Also, if you have these investments in a tax-advantaged account like a 401(k) or IRA, you don't have to worry about any of this - the distributions happen inside the account without creating a current tax bill.

This is exactly the kind of confusion that trips up so many people! You're definitely not alone in being surprised by capital gains on your 1099-DIV when you didn't sell anything personally. What's happening is that your mutual fund or ETF had to sell some of its underlying holdings during the year (maybe to rebalance, meet redemptions, or because the fund manager changed strategy), and those sales generated capital gains. By law, the fund has to distribute almost all of these gains to shareholders like you by year-end to avoid paying corporate taxes. So yes, you do need to report and pay taxes on box 2A (capital gain distributions), plus boxes 1a and 1b if they have amounts. The good news is that these capital gain distributions are usually taxed at the more favorable long-term capital gains rates rather than ordinary income rates. One tip: if this kind of surprise tax bill bothers you, consider looking into more tax-efficient funds (like broad market index funds) for your taxable accounts in the future. They tend to generate fewer unexpected distributions because they trade less frequently inside the fund.

Has anyone used those donation receipt tracking apps? I tried ItsDeductible last year and it was ok but not great for higher value items.

Your 18% donation rate is actually quite reasonable and shouldn't be a red flag by itself. I've seen clients donate 25-30% of windfalls without issues, especially when it's a one-time event like a property sale. The most important thing is having proper documentation for each donation. Since you mentioned keeping all receipts, make sure you have written acknowledgments from each charity for donations of $250 or more. These need to include the donation amount, date, and a statement that no goods or services were provided in exchange (or describe what was provided). One tip for future years: if you're planning to continue higher donation levels, consider establishing a pattern by documenting your charitable giving philosophy or creating a simple giving plan. This shows intentionality rather than randomness, which auditors prefer to see. The fact that TurboTax isn't flagging anything is also a good sign - their built-in audit risk assessment is pretty conservative. Your documentation sounds solid, so I wouldn't stress too much about it.

One thing I'm not seeing mentioned is the timing. Getting married in December 2025 vs January 2026 makes a HUGE difference for taxes. The IRS considers you married for the ENTIRE tax year even if you get married on December 31st. So if they just got married, they'll be "married filing jointly" for the entire 2025 tax year when they file in 2026.

As a tax professional, I want to address a few key points here. First, the $10k difference you calculated seems unusually high for those income levels - typically the marriage bonus for a $145k/$32k couple would be in the $3-5k range as others have mentioned. You might want to double-check those TurboTax calculations. That said, your friend will likely see some legitimate tax benefits. With such disparate incomes, married filing jointly usually results in savings because the higher earner's income gets "averaged" with the lower earner's income, potentially moving more income into lower tax brackets. However, I echo what others have said - marriage is a huge legal and financial commitment that goes far beyond taxes. It affects debt liability, property rights, inheritance, healthcare decisions, and more. If they were already planning to marry eventually, then this might have just accelerated their timeline. But if taxes were the primary driver, that's concerning. My advice: sit down with your friend, acknowledge that you may have been overzealous about the tax benefits, and suggest they speak with a tax professional to get accurate numbers. Most importantly, be supportive of their marriage regardless of how it started - they're the ones who ultimately made the decision.

Quick question about state filing requirements - does anyone know if a single member LLC holding company needs to file a separate state return? My LLC is registered in Wyoming but I live in California and I'm getting conflicting advice.

Just wanted to add some clarity on the Schedule C question from the original post. Even though your single-member LLC is a disregarded entity, you should NOT file Schedule C for passive investment activities. Schedule C is specifically for active business income and expenses. The key distinction is that holding investments - even through an LLC - is generally considered investment activity, not business activity. Your dividends go on Schedule B, capital gains/losses on Schedule D, and any rental income on Schedule E, just as others have mentioned. However, be careful if you start actively trading frequently or providing services related to your investments - that could potentially cross into business activity territory and change your filing requirements. The IRS looks at factors like frequency of transactions, time spent, and intent to make a profit from trading activities rather than long-term appreciation. Keep good records showing your LLC's investment nature versus any business activities, as this distinction can be crucial if the IRS ever questions your classification.

I've been through this exact situation with my consulting business in Germany. One thing that hasn't been mentioned yet is the timing of the check-the-box election - you need to file Form 8832 within 75 days of forming the entity OR by the due date of your return for the year you want the election to be effective. Also, regarding the self-employment tax concern that several people raised - if your foreign business involves providing services personally (like consulting), then yes, you'll pay SE tax on that income. However, if it's more passive investment income or rental income from the foreign entity, it might not be subject to self-employment tax even after the election. The key is understanding what type of business activities you're engaged in through the foreign entity. I'd strongly recommend getting a professional analysis of your specific situation before making the election, as it can't easily be undone once made.

Just wanted to add another consideration that I learned the hard way - if you make the check-the-box election, you'll also need to be very careful about the Foreign Earned Income Exclusion (FEIE) if you're living abroad. When your foreign entity becomes disregarded, that income is treated as directly earned by you, which can actually help you qualify for the FEIE if you meet the physical presence or bona fide residence tests. This could potentially exclude up to $120,000 (for 2023) of that foreign earned income from U.S. taxation, though you'd still owe self-employment tax on it. However, there's a catch - you can't claim both the FEIE and foreign tax credits on the same income. So you'll need to run the numbers to see which gives you a better result. In my case, the FEIE ended up being more beneficial than trying to claim foreign tax credits, especially since it doesn't eliminate the SE tax anyway. Also worth noting: if you're claiming the FEIE, you might want to consider making a Section 962 election if you have other foreign corporations that generate GILTI, as it can help with the overall tax optimization across all your international structures.