Be careful with dependent care FSAs - they're typically "use it or lose it" by the end of the plan year! I set aside $5000 last year and then our childcare situation changed (my mother-in-law retired and started watching the kids 3 days a week). We only spent about $3200 on paid childcare and LOST the remaining $1800 we had contributed! Still kicking myself over that one. Make sure you're very confident about your childcare expenses before committing to the full $5000.

Great question! I went through this exact same analysis last year. At your income level ($165k), you're definitely in a tax bracket where the Dependent Care FSA makes financial sense. Here's what I learned: The Child Tax Credit ($2,000 per qualifying child) is completely separate from childcare expenses and won't be affected by using the FSA. You'll still get the full $4,000 for your twins regardless. The FSA saves you taxes on that $5,000 contribution - at your income level, that's probably around $1,200-1,500 in tax savings depending on your state taxes. Since you're spending way more than $5,000 on daycare anyway, you're guaranteed to use the full amount. The "hassle" factor was my biggest concern too, but honestly it's pretty minimal. Most employers have mobile apps now where you just snap photos of receipts and submit them. I probably spend 10 minutes total per quarter on FSA paperwork. One tip: make sure to ask about your plan's grace period or rollover rules. Some plans let you carry over a small amount ($610 this year) or give you extra time to spend the money. Definitely worth maxing it out in your situation!

I'd suggest getting a formal appraisal before making the final decision between selling vs. donating. If the dress truly has a fair market value of $2,500-3,000 (which seems reasonable for a $5,400 dress in perfect condition), and if your fiancée has other itemizable deductions that would push her over the standard deduction threshold, the tax benefit could be meaningful. But here's something to consider - if she's facing $13k in capital gains, that puts her in a higher tax bracket where charitable deductions provide more benefit. A $2,500 deduction could save her $550-625 in taxes (22-25% bracket) versus maybe getting $1,000-1,500 from a sale after months of trying. Also, don't forget about state tax benefits if your state allows charitable deductions. The combined federal and state tax savings might actually exceed what you could realistically get from selling it at this point. One more tip: if you do donate, consider doing it early in the tax year so you have time to make additional charitable donations if needed to maximize the itemized deduction benefit.

I've been through a similar situation with high-value donations and capital gains, so I wanted to share a few practical insights that might help. Regarding the appraisal cost - yes, you typically pay upfront (usually $150-300 for clothing items), but this cost is also tax-deductible as a miscellaneous expense related to tax preparation. So it doesn't completely eat into your savings. For timing, you're right that it just needs to happen before December 31st for that tax year. However, I mentioned doing it early because if the donation alone doesn't get you over the standard deduction threshold, you have time to plan other charitable giving throughout the year to maximize the benefit. One strategy I used: I bunched multiple years' worth of charitable giving into one tax year (donated items I was planning to give away over 2-3 years all at once). This pushed me well over the standard deduction threshold, making all the donations much more valuable tax-wise. Also, don't overlook that if she's in a high tax bracket due to capital gains, she might benefit from the Net Investment Income Tax (3.8%) reduction as well, which could add another layer of savings on top of the regular income tax benefit. The math really does favor donation in higher tax brackets, especially when you factor in both federal and state benefits.

Anyone know how this works if your company went through an acquisition? My RSUs converted to acquiring company stock with a weird conversion ratio and now I have no idea how to calculate my basis.

Great question! You're right to be confused - this is one of the most misunderstood aspects of RSU taxation. The correct answer is that your cost basis is $1,960 ($35 × 56 shares), not $2,800. Here's the key insight: when your RSUs vested, you received $2,800 in taxable income (80 shares × $35). Your employer withheld 24 shares worth $840 to pay the income taxes on that $2,800 - think of this as equivalent to withholding cash from your paycheck for taxes. The 56 shares you actually received each have a cost basis of $35 (the fair market value on vesting day). You already paid income tax on the full $2,800 value through the share withholding mechanism, so when you eventually sell these 56 shares, you'll only owe capital gains tax on any appreciation above $35 per share. This isn't double taxation - it's actually protecting you from it. The $840 worth of shares that were withheld served as your tax payment, and the remaining shares start with a "clean" basis for capital gains purposes. If the basis were $2,800 for only 56 shares, you'd effectively be getting an artificial step-up that the IRS doesn't allow.

Another strategy worth considering at your income level is a Deferred Compensation plan if your employer offers one. These plans let you defer a portion of your current salary (and the associated tax liability) to future years when you might be in a lower bracket. The downside is you're essentially lending money to your employer unsecured, so there's credit risk if the company goes under. Also look into Conservation Easements if you're interested in land conservation and have significant tax liability to offset. You can donate development rights on property (land you own or purchase specifically for this purpose) and potentially get a charitable deduction worth several times your investment. However, the IRS has been scrutinizing these heavily lately, so make sure any program you consider is well-established and conservative in its valuation approach. For your existing investments, consider tax-efficient fund placement - holding tax-inefficient investments in your tax-advantaged accounts (401k, IRA) and tax-efficient index funds in taxable accounts. This can meaningfully reduce your annual tax drag on investment growth.

Consider looking into Captive Insurance Companies (CICs) if you own a business or have significant business income. Under Section 831(b), you can elect to have your captive taxed only on investment income, not insurance premiums, for captives with less than $2.3M in annual premiums. This allows you to deduct legitimate business insurance premiums paid to your own captive, while the captive accumulates wealth in a tax-advantaged structure. Another often-overlooked strategy is investing in Qualified Opportunity Zone funds, which allow you to defer capital gains taxes by investing those gains into designated economically distressed communities. You get a 10% step-up in basis after 5 years, 15% after 7 years, and if held for 10+ years, any appreciation in the QOZ investment itself is tax-free. For immediate tax relief, look into Cost Segregation studies if you own any commercial real estate or rental properties. This allows you to accelerate depreciation on certain components of buildings (like flooring, lighting, landscaping) from 27.5-39 years down to 5-15 years, creating significant upfront deductions. Finally, consider establishing a Charitable Remainder Trust (CRT) if you have highly appreciated assets. You get an immediate charitable deduction, avoid capital gains tax on the sale of the appreciated assets within the trust, and can receive income payments for life while ultimately benefiting charity.

I went through something similar with another bankrupt stock last year. One thing that helped me was creating a simple spreadsheet documenting everything - purchase date, amount invested, bankruptcy filing date, final liquidation date, and any final payments received. This made it much easier when filling out Form 8949. Also, don't forget that if your capital losses exceed $3,000 for the year, you can carry forward the remaining losses to future tax years. With a $2,681 loss ($2,700 - $19), you'll likely be able to use some of it to offset future gains or continue deducting $3,000 annually until it's exhausted. Keep all your brokerage statements and any communications about the bankruptcy - the IRS could ask for documentation if they have questions about your worthless security deduction.

One additional tip that saved me a lot of headache - make sure to report this as a capital loss, not an ordinary loss. I initially tried to claim my worthless stock as an ordinary business loss since I considered myself an "active trader," but the IRS will almost certainly classify individual stock investments as capital transactions unless you're a registered securities dealer. This means your $2,681 loss from BBBY will be subject to the capital loss limitations (up to $3,000 per year against ordinary income), but the good news is any unused portion carries forward indefinitely. Given the size of your loss, you'll likely be able to use it all within a year or two. Also, double-check that you're reporting this in the correct tax year. Since BBBY went through bankruptcy in 2023, this loss should be claimed on your 2023 tax return, not 2024, even if you're just now preparing your taxes. The worthless security rules are based on when the stock became worthless, not when you "realized" or documented the loss.