Something else to consider - certain states tax capital gains differently than the federal government. California, for example, treats all capital gains as ordinary income, which can result in significantly higher state taxes compared to federal.

Great question! I went through something very similar last year when I sold some tech stock I'd held for about 8 years. The key thing to understand is that LTCG taxes are absolutely progressive - your entire $530k won't be hit with the 20% rate. Here's what happens: Your $290k salary gets taxed first using regular income brackets. Then your $530k in capital gains gets "stacked" on top of that and taxed using the LTCG brackets. Since your salary already puts you above the 0% LTCG threshold, you won't benefit from that rate. For 2025 MFJ, the 15% LTCG rate applies up to $600,050 total income. Since you're starting at $290k salary, roughly $310k of your gains ($600,050 - $290k) will be taxed at 15%. Only the remaining $220k gets the 20% rate. Don't forget about the 3.8% Net Investment Income Tax that kicks in at $250k MAGI for MFJ - that'll apply to your entire $530k gain since you're well over the threshold. So your effective rates become 18.8% and 23.8% respectively. One more thing - at that income level, definitely consider the timing of the sale. You might want to spread it across tax years if possible to potentially stay in lower brackets, though you'd need to run the numbers with a tax pro to see if it makes sense.

Quick question for anyone - do I need to file this Form 2439 with my tax return or just keep it for my records?

I went through this exact same confusion with Form 2439 last year! One thing that really helped me understand it was thinking of it like this: imagine your mutual fund made $124.67 in profit that belongs to you, but instead of sending you a check, they kept the money and paid the taxes for you ($26.18). You still have to report that $124.67 as income because it's legally yours, but you get to deduct the $26.18 they already paid. The remaining $98.49 is essentially "trapped" in your investment - you were taxed on it but didn't get to spend it. That's why your cost basis goes up by that amount. When you eventually sell, you'll have paid tax on that $98.49 already, so increasing your basis ensures you don't pay tax on it again. It's actually protecting you from double taxation, even though it feels backwards at first! Keep excellent records of this - I made a simple spreadsheet tracking my original purchase price, Form 2439 adjustments, and final adjusted basis. It saved me a lot of headache when I sold some shares this year.

A bit confused after reading all of these comments. So if I sold some furniture on Facebook Marketplace for like $800 total last year (stuff I just wanted out of my house, sold for less than I paid), I don't need to report anything because 1) it's under the $20k threshold for getting a 1099-K and 2) I didn't make a profit anyway?

Just to clarify something that might help others reading this - the key distinction everyone's touching on is between *reporting requirements* and *tax obligations*. The 1099-K threshold only determines whether platforms like StubHub have to send you (and the IRS) a form. It doesn't change your underlying obligation to report taxable income. For your specific situation with the concert tickets, if you sold them for less than you paid (which sounds like the case), you actually had a loss, not income. Personal losses like this aren't deductible, but they're also not taxable income you need to report. The bottom line: No 1099-K required under current thresholds, and no taxable income since you sold at a loss. You should be good to file your return. Just keep your records showing what you originally paid vs. what you sold them for in case you ever need to demonstrate there was no profit.

I've been dealing with payroll tax issues for years as an accountant, and this thread has some excellent advice! Just wanted to add one more resource that might help - if you're still having trouble getting through to the right people at your county tax offices, you might want to check if they have a taxpayer advocate or ombudsman office. Many counties have these departments specifically to help resolve disputes and errors like this. They often have more authority than regular customer service reps and can directly interface with employer payroll systems. In my experience, they're also much more responsive than the main tax office lines. You can usually find contact info for taxpayer advocate services on your county's main website under the tax department section. They're particularly helpful when you need official documentation to present to stubborn HR departments - they can provide letters confirming which county you should actually be paying taxes to. Good luck getting this resolved! Don't give up - you're absolutely entitled to get your money back from this payroll error.

I've been following this thread and wanted to share another angle that might help - if you're getting pushback from HR about processing refunds for past incorrect withholdings, you can also file a claim directly with Madison County for a refund while simultaneously working on getting your employer to fix the ongoing issue. Most counties have a fairly straightforward refund process for taxes that were paid in error. You'll need to provide documentation showing you don't actually live or work in their jurisdiction (utility bills, lease agreements, employment verification from Jefferson County, etc.). This gives you two paths to recovery instead of being completely dependent on your employer's cooperation. The key is to pursue both options simultaneously - get Madison County to refund the incorrectly paid taxes while also pressuring your employer to fix their payroll system so it doesn't keep happening. Some counties even have online refund request forms that make the process pretty simple. Just make sure to keep detailed records of everything in case there are any issues with double-refunds or timing conflicts between what your employer processes and what the county processes.

This is such a helpful thread! I've been dealing with a similar situation after relocating from New Jersey to Florida for my job. What's been tricky is that I still travel back to NJ frequently for work and to visit family, so I'm probably there about 80-90 days per year. One thing I learned the hard way is that New Jersey has what they call a "safe harbor" rule - if you can prove you were a non-resident for the entire tax year AND you spent fewer than 183 days in NJ, you're generally in the clear. But they're really strict about the day counting, and they include any part of a day as a full day. I started keeping a detailed travel log in a simple Excel spreadsheet with dates, locations, and reasons for travel. My tax preparer said this kind of documentation is gold if you ever get audited. Also found out that flight records and hotel receipts can serve as backup documentation for your physical presence claims. The other thing that caught me off guard was that NJ looks at whether you maintained a "permanent place of abode" in the state. Even if you rent out your old house, if you have access to it (like keeping keys or having family there), they might still consider it available for your use. Had to get a formal rental agreement that explicitly prohibited my access to the property to clean this up.

This has been such an eye-opening discussion! As someone who's been considering a move from a high-tax state to a low-tax one, I had no idea the residency determination process was this complex and thorough. The detail about keeping a daily log of physical presence is something I never would have thought of, but it makes total sense from an audit perspective. And the fact that states can look at everything from Amazon delivery addresses to veterinary records for pets is honestly both impressive and a little concerning from a privacy standpoint. One question I have after reading all these experiences - for people who work remotely and have genuine flexibility about where they live, are there any states that are particularly "friendly" to new residents in terms of not being overly aggressive with residency audits? Or conversely, are there states that are known for being especially difficult even when someone has legitimately moved? It sounds like California, New York, and New Jersey are pretty notorious for aggressive enforcement, but I'm curious if there are states on the other end of the spectrum that are more welcoming to newcomers establishing residency. Also, has anyone dealt with the situation where you need to file as a part-year resident in multiple states during a move year? I'm wondering how complicated that gets and whether it's worth timing a move to coincide with the tax year.