This whole thread has been a goldmine of information! I'm in a slightly different situation - my company offers both ESPP and RSUs, and I'm getting confused about which imputed income amounts on my W-2 relate to which type of stock compensation. My HR department lumps all the "supplemental wages" together on my paystubs, so it's hard to tell what's ESPP discount income versus RSU vesting income. Has anyone dealt with separating these different types of imputed income for tax purposes? I want to make sure I'm adjusting the cost basis correctly for each type of stock sale. Also wondering if the same cost basis adjustment principle applies to RSUs - when they vest and show up as income on my W-2, does that become my cost basis for when I eventually sell those shares?

This has been such an educational thread! I'm dealing with ESPP taxes for the first time and was completely overwhelmed until I found this discussion. One thing I wanted to add that might help others - if you're using H&R Block software instead of TurboTax, the process is slightly different. You need to go to the "Investment Income" section, then "Stocks, Mutual Funds, Bonds" and select "Employee Stock Purchase Plan" from the dropdown. There's a separate screen where you can enter the "Income reported to employer" amount, which is where you put the imputed income from your W-2. I also learned the hard way that you need to keep really good records throughout the year. I wish I had tracked each ESPP purchase and sale with the corresponding imputed income amounts as they happened, rather than trying to piece it all together at tax time. For next year, I'm going to create a simple spreadsheet with columns for purchase date, shares purchased, purchase price, sale date, sale price, and imputed income amount. Thanks to everyone who shared their experiences and resources - this community is amazing for helping each other navigate these complex tax situations!

Great question! This is definitely a complex situation that many couples face. Based on what you've described, here are the key points to consider: **Mid-year switching is possible but requires specific conditions:** 1. Your wife starting a new job IS a qualifying life event that allows mid-year benefit changes 2. Your employer must allow FSA modifications for qualifying events (not all do) 3. You'd need to either cancel your FSA entirely or switch to a limited-purpose FSA (dental/vision only) **Important timing considerations:** - If you switch mid-year, your HSA contribution limit will be prorated based on eligible months - Any unused FSA funds might be at risk depending on your plan's rules - Your wife's employer HSA contributions count toward the annual limit **My recommendation:** Contact your HR department immediately to ask about: 1. Whether they allow FSA cancellation/modification for qualifying events 2. If they offer limited-purpose FSA as an option 3. What happens to your current FSA balance if you make changes The cleanest approach might be waiting until your next open enrollment period to decline the FSA and switch to your wife's HDHP/HSA plan, but you'd miss out on her employer contributions in the meantime. Get everything in writing from HR - these rules can be confusing even for benefits administrators!

I went through this exact same situation two years ago and wanted to share what worked for us. My husband had a healthcare FSA through his employer, and I got a new job with an HDHP and HSA match. The key was understanding that my new job qualified as a "qualifying life event" under IRS rules, which allowed us to make mid-year changes to our benefits. However, we had to act quickly - most employers only give you 30 days from the qualifying event to make changes. Here's what we did: 1. I contacted my husband's HR immediately to ask about switching from full healthcare FSA to limited-purpose FSA 2. We had to provide documentation of my new job offer and HDHP enrollment 3. His employer allowed the change, and we switched to limited-purpose FSA effective the month I started my new job The limited-purpose FSA only covers dental and vision expenses, which made us HSA-eligible for medical expenses. We were able to keep our existing FSA balance for dental/vision and start contributing to the HSA for medical expenses. One thing to watch out for - make sure you understand your current FSA's "use it or lose it" rules. Some plans have a grace period or allow a small rollover, but others don't. We ended up scheduling some overdue dental work to use up our FSA balance before the year ended. The timing aspect is crucial - don't wait to contact HR about this!

The IRS Free File program (https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free) includes free state filing for most participating software providers if your adjusted gross income is under $79,000. If you're over that threshold, many states offer their own free filing systems on their department of revenue websites. For multiple states, I'd recommend checking each state's official tax website - most have free e-file options for residents. Wisconsin has a free system called I-File, and Minnesota offers free filing through their Department of Revenue site. You can also use the Volunteer Income Tax Assistance (VITA) program if your income is under $64,000 - they'll help you file federal and all necessary state returns for free. Just make sure you understand the reciprocity rules between states - some have agreements where you only owe taxes to your resident state even if you worked elsewhere, while others require filing in each state where you earned income.

Hey Chloe! I work in payroll and see this issue all the time. Since you mentioned both Starbucks and Home Depot, here's what I'd suggest: For Starbucks, try logging into your Partner Hub account (if you still have access) - they usually post W-2s there first. For Home Depot, check if you can access MyApron or their employee self-service portal. If you can't access those systems, call their payroll departments directly rather than general HR. Ask specifically about "year-end tax documents" and confirm they have your correct mailing address. Sometimes companies send W-2s to the address on file from when you started, not your current one. Also important: both companies are required by law to have mailed or made available your W-2s by January 31st. If it's already February and you haven't received them, they're technically in violation. Don't be afraid to mention this when you call - it usually gets faster action. One more tip: if either company uses a payroll service like ADP, Paychex, or Workday, you might be able to create an account on those platforms using your SSN and previous employer info to access your W-2 electronically.

Has anyone had experience with how suspended passive losses affect your MAGI when you finally get to use them? I've been accumulating losses on my rental for 5 years and am thinking of selling soon.

As someone who's dealt with this exact same confusion, I can confirm what others have said about using the pre-depreciation rental income figure for MAGI calculations. In your case, that would be the $4,000. One thing that helped me understand this better is thinking about why MAGI exists in the first place - it's meant to capture your actual economic income flow for determining eligibility for various programs. Depreciation is a "paper loss" that doesn't represent actual cash leaving your pocket, so it gets added back. The passive loss limitation (showing $0 on line 25) is a separate issue from MAGI calculation. Those suspended losses are essentially being "stored" for future use when you either have passive income to offset or sell the property. For your situation with $4,000 net rental income before depreciation, that's what you'd include in your MAGI calculation for most purposes. Just remember that if you're calculating MAGI for different programs (ACA subsidies vs IRA contribution limits, etc.), there might be slight variations in what other items get added back to your AGI.

Unfortunately, there aren't many ways to spread out the gain from selling a single asset like your classic car over multiple years. The sale is treated as occurring in the tax year when the transaction closes, so the entire gain gets recognized at once. However, there are a few strategies you might consider: 1. **Installment sale method** - If the buyer is willing, you could structure the sale to receive payments over multiple years (like $50K this year, $45K next year). This would spread the gain recognition across tax years, but it does come with risks if the buyer defaults. 2. **Like-kind exchange (Section 1031)** - This generally doesn't apply to personal-use vehicles, but if you could argue the car was held for investment purposes (which might be difficult given it was a hobby project), you could potentially defer gains by exchanging into another qualifying asset. 3. **Charitable strategies** - If you're charitably inclined, you could donate a portion of the car's value to charity and sell the remainder, though this gets quite complex. For California specifically, yes, you're looking at some of the highest combined capital gains rates in the country. The timing strategy of waiting until January could be very beneficial if either of your incomes will be significantly lower next year. Also consider whether you have any capital losses to harvest from other investments before year-end to offset some of the gain. Given the complexity with state taxes, Medicare impacts, and the significant dollar amounts involved, a consultation with a tax professional who handles high-value personal property sales would definitely be money well spent before you commit to the sale.

Welcome to the community, Fatima! Great questions that really add to this discussion. For the installment sale method, yes, you'd need formal documentation even for something as "simple" as two payments. The IRS requires written agreements specifying payment terms, interest rates (using applicable federal rates), and what happens if payments are missed. You'd also need to calculate the gross profit percentage and recognize gain proportionally with each payment received. It's definitely not a casual arrangement - both parties need to understand the legal and tax obligations. Regarding the charitable donation strategy - you're absolutely right that donating to a qualified automotive museum or educational charity could provide a significant tax deduction based on fair market value. However, there are some important limitations: for non-cash donations over $5,000, you need a qualified appraisal, and deductions over $500,000 require additional IRS approval. Plus, if your adjusted gross income isn't high enough, you might not be able to use the full deduction in one year (though you can carry forward unused portions for up to five years). The key consideration is whether Ava and her husband need the cash now versus the potential tax savings over time. Given they mentioned wanting to pay down their mortgage, the immediate cash might be more valuable than the deduction benefits. One thing I'd add for anyone in this situation - document EVERYTHING about your restoration process going forward. Take photos, keep receipts, maintain a restoration log. Future you will thank present you for the organization when tax time comes!