Thanks for sharing your sister's experience. My taxes are definitely not straightforward though - I have the photography business with lots of expenses and deductions, plus I did some contractor work with 1099s, and I have some investment income. Do you think the online services can handle that level of complexity? I'm worried about missing deductions or making mistakes.

For your situation with a photography business, contractor income, and investments, most DIY tax software might be challenging to use effectively. The business portion with Schedule C deductions can get complex, especially for correctly categorizing photography equipment, travel, home office, etc. In your case, I'd recommend using your documentation to find a new accountant ASAP. Look for someone who specializes in small business taxes and has experience with creative professionals. My brother-in-law is a musician and found an accountant through a local small business association who understands the unique deductions for creative professions.

Be careful with chargebacks though. A lot of accountants will blacklist you if you do this, and they talk to each other. Might be better to try negotiating first.

This is really helpful, thanks! Do you know if the IRS has issued any specific guidance about this for crypto specifically? I've looked around but couldn't find anything that explicitly says "summary reporting is fine for crypto.

The IRS hasn't issued explicit guidance saying "summary reporting is fine for crypto" specifically, but they treat crypto as property for tax purposes, which means it follows the same reporting principles as other capital assets (like stocks). The instructions for Form 8949 do mention that you can use a separate statement for reporting multiple transactions, which is essentially what summary reporting is. In practice, the IRS is more concerned with accurate reporting of the totals rather than seeing each individual transaction on the form itself.

My brother got audited last year and had a lot of crypto trades. They basically just wanted to see his transaction records and make sure the totals matched what he reported. They didn't dig into each individual transaction, just verified he had proper documentation for everything.

What number did you call? I tried their main support line last week and was on hold for over an hour before giving up.

Good point about the records! Does anyone have a good template or system they use to track this stuff? My company uses E*Trade for our ESPP but their reporting seems confusing and incomplete.

I created a simple spreadsheet with columns for all the important dates and values. The key is recording everything immediately when each purchase happens. E*Trade actually does have all the info, but it's spread across different reports and some of it disappears after a couple years. The most important reports to save are the "Purchase Confirmation" (shows your actual purchase price and discount) and the "Grant History" report (shows offering dates and FMV). Save these as PDFs right after each purchase period. Also save your Form 3922 that you get each tax year - it has the official record of your ESPP purchases.

Wait really?? I've been doing this completely wrong then. My company has the lookback feature and I've just been treating the entire difference between my purchase price and sale price as capital gains after holding for 1+ year. Should I file amended returns for previous years??

This is making my head spin! So with the lookback provision, there are potentially TWO separate ordinary income components? And I need to track the stock price on both the offering date and purchase date for every single purchase period? Ugh, I'm starting to think the 15% discount isn't worth all this tax complexity.

Thanks for the advice. Do you think if he files an amended return now before any investigation happens, would that help minimize the damage? Also, should he report the tax preparer?

Filing an amended return quickly will definitely help minimize the damage. The IRS is generally more lenient when taxpayers voluntarily correct errors before being contacted about an examination. He'll still have to pay back the incorrect refund amount, but may avoid or reduce the fraud penalties. And yes, he should absolutely report the tax preparer. He can file Form 14157 (Complaint: Tax Return Preparer) with the IRS. Tax preparers who knowingly file false returns can face significant penalties themselves, including potential criminal charges and being barred from preparing returns.

This is a good point. I sold some stuff on eBay last year and got a 1099-K even though it wasn't a business. Maybe his preparer is counting something like that?