This has been an incredibly educational thread! I'm a newcomer to this community but have been struggling with a similar tax situation involving capital gains and ordinary income. One thing I wanted to add that hasn't been mentioned yet is the importance of keeping detailed records throughout the year, not just at tax time. I started tracking my realized and unrealized gains monthly after getting surprised by a larger-than-expected tax bill a few years ago. What really helped me was creating a simple tracking spreadsheet that shows: - Running total of ordinary income YTD - Realized capital gains/losses by month - Estimated tax impact using the stacking method described here - Projected year-end position in different capital gains brackets This approach has helped me make much better decisions about when to sell investments. For example, I realized I was sitting on some losses that I could harvest to offset gains, and I was able to time some sales to stay within the 0% capital gains bracket. For anyone just starting to deal with significant capital gains, I'd strongly recommend setting up some kind of tracking system early in the year rather than trying to figure everything out in December. The peace of mind alone is worth it, and it makes tax planning discussions with professionals much more productive when you have all the data organized. Thanks to everyone who contributed such detailed explanations - this is exactly the kind of practical guidance that's hard to find elsewhere!

Welcome to the community and thanks for such a detailed question! I can see from the great responses here that you've gotten excellent explanations of how the stacking method works for capital gains taxation. Just to add one more perspective as someone who's dealt with inherited stock sales - make sure you also consider whether any of your inherited stocks qualify as Section 1202 qualified small business stock (QSBS). While this is less common with inherited assets, if any of the stocks meet the criteria, you could potentially exclude up to $10 million or 10x your basis (whichever is greater) from federal capital gains tax entirely. This is a pretty specialized situation, but given that you're dealing with $83k in inherited stock gains, it might be worth checking if any of the companies qualify. The requirements include things like the stock being from a C-corporation with gross assets under $50 million when issued, and the business meeting certain "active business" tests. Even if the QSBS exclusion doesn't apply, the stepped-up basis point that others mentioned is huge for inherited assets. Make sure you have documentation of the fair market value on the date of inheritance - this becomes your new cost basis and can dramatically reduce your taxable gains compared to what the original owner would have paid. The calculations others provided look solid for your situation. With most of your gains likely falling in the 0% bracket due to your income level, you're in a pretty favorable position tax-wise. Good luck with your planning!

Congratulations on your pregnancy! I know the tax situation can feel overwhelming when you're already dealing with so much. Just to add to the great advice already given - while you can't claim your unborn baby as a dependent this year, you should definitely start keeping track of all your pregnancy-related medical expenses now. This includes prenatal vitamins, doctor visits, ultrasounds, lab work, and even mileage to medical appointments. Even if you don't itemize this year, these expenses could help you reach that 7.5% AGI threshold for medical deductions, especially since you'll likely have delivery costs later in the year. Also, once your baby arrives, make applying for their Social Security Number a priority - you'll need it for next year's taxes to claim them as a dependent and get that Child Tax Credit. The hospital usually has the forms, or you can apply online at ssa.gov. Don't stress too much about the current filing deadline - you've got time to get everything right!

Hey Andre! I totally understand the stress - I went through something similar when I was pregnant with my first. Just want to echo what everyone else has said: definitely cannot claim the baby until they're actually born with an SSN, but you're absolutely on the right track thinking ahead! One thing I don't think anyone mentioned yet - if you're planning to breastfeed, you can actually deduct the cost of a breast pump and related supplies as medical expenses (even if insurance covers part of it, you can deduct your out-of-pocket portion). Also, if you end up needing to modify your home for the baby (like installing safety equipment), some of those costs might be deductible too. Since you're a dental hygienist, you probably have good insurance, but don't forget that adding your baby to your health plan within 30 days of birth won't require waiting for open enrollment - it's a qualifying life event. You'll want to factor that premium increase into your withholding calculations too. You've got this! The fact that you're asking these questions now shows you're being super responsible about planning ahead.

I went through this exact situation when I got married three years ago, and it was honestly one of the most confusing aspects of combining finances! The default MFJ withholding is basically broken for couples with significant income differences. Here's what I learned the hard way: when you both submit blank MFJ W4s, each employer calculates withholding as if that single job represents your entire household's income. So your employer treats your $230k as if it's the total household income and withholds accordingly, while her employer treats her $85k the same way. The problem is that your combined $315k income actually pushes you into much higher tax brackets than either employer realizes. In our case (similar income split to yours), we ended up owing almost $8,000 when we filed jointly the first year because we just assumed the system would figure it out. It was a painful lesson! For your situation, I'd recommend starting with about 70-80% of what the Multiple Jobs Worksheet suggests - so maybe $350-400 extra per check for you instead of the full $500, and have your fiancée add around $50-75. This approach worked well for us and felt more psychologically balanced. The key is that you can always adjust mid-year once you see how it's working out. Don't stress about getting it perfect immediately - most people need to tweak their withholding at least once after major life changes like marriage.

This is such a helpful thread! I'm in a very similar situation - getting married next month with a big income gap ($180k vs $75k) and was completely confused about the W4 withholding. Reading through all these responses, it sounds like the consensus is to start with about 75% of the Multiple Jobs Worksheet recommendation and split some of the extra withholding between both spouses for psychological balance. I'm definitely going to try the approach several people mentioned - having the higher earner add around $350-400 extra per check and the lower earner add $50-75. The explanation about how each employer treats their payroll as if it's the total household income really clicked for me. No wonder the default MFJ withholding fails so badly with income disparities! I'm also going to bookmark that IRS safe harbor rule (withhold at least 110% of prior year tax if AGI > $150k) as a backup strategy. Better to get a small refund than deal with a massive tax bill like some of the horror stories shared here. Thanks everyone for sharing your real-world experiences - this is way more practical than anything I could find in official IRS publications!

Quick tip on the PayPal/1099-K situation - PayPal is required to issue 1099-Ks for annual payments over a certain threshold, but that doesn't mean you have to pay taxes twice! When I enter my tax info, I always: 1) Enter the 1099-NEC first 2) When TurboTax asks about 1099-K, I say yes, I received one 3) When it asks if this income was already reported elsewhere, I say YES 4) It'll then ask you to identify which income it duplicates This way everything is properly documented but not double-counted. Hope that helps!

Based on your situation, here's what I'd recommend: **For the teaching income ($1,875.50):** You're absolutely right to only report this once. Use the 1099-NEC from the makerspace and ignore the PayPal 1099-K for the same payments. **For the $31.75 reimbursement:** This shouldn't be included as income since it was reimbursement for out-of-pocket expenses you incurred for the classes. You can subtract this from your total income, but then you also can't claim those material costs as expenses. **For the $25 hobby sale:** Unfortunately, yes, you need to report this as "Other Income" even though you lost money overall. The elimination of hobby expense deductions really stings in situations like yours. **Consider the business angle:** Given that you teach classes regularly at the makerspace, keep records, and have expertise in woodturning, you might actually qualify to treat this as a business rather than a hobby. This would let you use Schedule C and deduct your teaching-related expenses against your income. The key is showing profit motive - even if you're not profitable yet, if you're operating in a businesslike manner, it could qualify. I'd suggest talking to a tax professional about whether your teaching activities meet the business criteria. It could save you money and better reflect the reality of what you're doing.

2 Has anybody used Drake Tax for this kind of situation? My accountant uses it and claims it's the best for complex investment scenarios, but I'm wondering if it's worth switching to them from my current guy who uses Lacerte.

For high-volume traders like yourself, I'd strongly recommend considering FreeTaxUSA Deluxe. I know it doesn't get mentioned as much as the big names, but it handles complex investment scenarios surprisingly well for the price point. What sets it apart is that it properly imports broker data while preserving transaction details that other software often strips out. The wash sale calculations work across multiple brokerages, and it handles Form 8949 entries efficiently even with thousands of transactions. The real advantage is in the user interface - when you need to review or adjust imported data (which you will with that volume), FreeTaxUSA makes it much easier to navigate and edit individual transactions compared to TurboTax or H&R Block. For Form 6781 straddle reporting, it provides clear guidance and proper categorization. At $15 for the Deluxe version, it's worth trying as a backup option even if you go with something else as your primary software. You can import your data and see how it handles everything before committing to file with it.