Don't overlook ATX! It's way more affordable than the big names (around $1,200 for their mid-tier package that handles everything you mentioned) and has a really user-friendly interface for beginners. I switched from TaxAct Pro to ATX last year and found the learning curve really manageable. The interview-style preparation makes it easy when you're just starting out, and the bank product options are decent too if you want to offer those services.

As someone who just finished their first tax season, I can't stress enough how important it is to factor in the learning curve when choosing software. I went with ProSeries because of all the recommendations, but honestly wish I had started with something simpler. The interface is powerful but can be overwhelming when you're trying to learn both tax prep AND new software simultaneously. I probably spent 30% more time per return in my first month just figuring out where everything was located. Based on what you've described - 40-50 returns with mostly straightforward situations - I'd actually recommend starting with TaxAct Pro or Drake like others mentioned. You can always upgrade to more robust software once you've built your confidence and client base. The money you save in year one can go toward better training or marketing to grow your practice. Also, whatever you choose, invest in their training materials or webinars. That upfront time investment will save you hours during busy season when you're under pressure to get returns done quickly.

Regarding estimated tax payments - since you're looking at owing around $6,375 in federal capital gains tax (assuming the 15% rate applies), you should definitely consider making an estimated payment to avoid underpayment penalties. The general rule is if you'll owe more than $1,000 when you file, you should make estimated payments. You can either pay 25% quarterly or make one lump sum payment now for the full amount. You can make the payment easily through the IRS Direct Pay system online - just search for "IRS Direct Pay" and you can pay directly from your bank account. Make sure to specify it's for estimated taxes when you make the payment. Also, double-check which tax bracket you're actually in after adding the capital gains to your regular income. While capital gains are taxed at preferential rates, they can still push you into higher brackets for other calculations.

Just want to add some perspective as someone who went through this exact situation a couple years ago. With your $78K income and $42,500 in long-term capital gains, you're looking at the 15% federal rate as others mentioned, so around $6,375 in federal taxes. But here's what I wish someone had told me - definitely make that estimated payment sooner rather than later. I waited until December and ended up with underpayment penalties that cost me an extra $400. The IRS expects you to pay as you earn, so even though you sold in summer, they want their cut by the quarterly due dates. One other thing - if you have any investments currently at a loss, consider selling some of those before year-end to offset your gains. I was able to reduce my taxable gains by about $8,000 this way by selling some underperforming stocks I was planning to dump anyway. Just make sure you understand the wash sale rules if you plan to buy them back. The silver lining is that at least you held for more than a year - short-term gains would have been taxed as ordinary income, which would have been much more painful at your income level.

Has anyone used the cost basis feature in H&R Block? TurboTax was giving me errors when I tried to enter some of my stock transactions that had wash sales. Wondering if another software might handle it better.

Just wanted to chime in with some additional perspective on the software discussion. I've used both TurboTax and H&R Block for capital gains reporting over the years, and honestly both have their strengths and weaknesses. One thing I learned the hard way is to always double-check that your software is properly handling wash sale adjustments. I had a situation where I sold stock at a loss and bought similar shares within 30 days, creating a wash sale. The software I was using at the time didn't catch it automatically, and I ended up having to file an amended return when I realized the mistake. Also, if you're dealing with a lot of transactions, consider getting the physical forms (Schedule D and Form 8949) and doing a few by hand first to understand the process. It helped me catch errors in my tax software and gave me confidence that everything was being calculated correctly. The IRS website has good examples of how to fill these out properly.

I'm a bit confused. I have a client with a family partnership that owns mineral rights, but they're not actively involved in operations - they just receive checks from the oil company. Should I still be reporting this on page 4 of Form 1065? Or should it go somewhere else?

As someone who's dealt with similar mineral royalty reporting issues, I'd recommend creating a standard checklist for your oil and gas partnerships to ensure consistency across all your clients. Based on what others have shared here, the key is proper categorization rather than lumping everything together. Here's what I've found works well: 1. Always report royalty income on page 4 as portfolio income (confirms it's not subject to SE tax) 2. Break out expenses by their true nature - don't default everything to line 13i 3. Maintain detailed supporting schedules for any "other deductions" reported on line 20 4. Keep good documentation of the partnership's passive vs. active role in operations The IRS instructions may be vague, but consistent application of these principles has served me well. If you're still uncertain about specific situations, the suggestions about getting direct IRS guidance or using specialized tax research tools might be worth exploring for your more complex cases. One additional tip: make sure your K-1s clearly identify the character of income being passed through to partners so they can properly report it on their individual returns.

Has anyone tried using tax software's built-in organizers for Schedule B? I use Lacerte and their partnership organizer includes simplified versions of the Schedule B questions, but I find clients still get confused by them.

I've been dealing with this exact frustration for years! What's helped me tremendously is creating a "Schedule B Quick Reference" sheet that I send to clients beforehand. It groups the questions by topic (foreign transactions, elections, distributions, etc.) with simple yes/no checkboxes and examples. The key insight I had was that most clients don't understand WHY we're asking these questions. So I added a brief explanation for each section like "This helps us determine if special reporting is required" or "This affects your tax basis calculations." Once clients understand the purpose, they're much more patient with the process. I also learned to triage during the initial client meeting - I ask a few key screening questions first (any foreign activity, unusual transactions, new elections) and that tells me which sections of Schedule B will actually be relevant. For a simple two-person service partnership, I can skip entire sections and focus only on what matters. The time investment upfront to create good intake materials pays off tremendously. My clients now come to meetings prepared, and we spend our time on actual tax planning instead of administrative questions.