What about staking rewards? Are those taxed when received or when sold?

Staking rewards are generally taxed as ordinary income when you receive them, based on their fair market value at that time. They establish your cost basis for those coins. Then, when you eventually sell those staking rewards, you'll calculate capital gains/losses based on the difference between your selling price and that initial value when received. This is similar to how mining is treated - taxed as income when received, then potentially subject to capital gains tax when eventually sold.

Form 8938 is for "specified foreign financial assets" - the IRS hasn't definitively stated that crypto qualifies for this. Most tax pros are taking the conservative approach and including crypto if it's held on foreign exchanges and meets the threshold. Better safe than sorry with FBAR and 8938 reporting!

Thank you for sharing your experience! I just checked my county's website and found a property search function I didn't know about. You're right - they do have the assessed value listed even though bills haven't been mailed. Does having the assessed value mean it's officially "imposed" as someone mentioned above? I want to make sure I'm following the proper IRS guidelines.

Yes, if you can see the assessed value on the official county website, that means the tax has been "imposed" for IRS purposes. The physical bill is just a notification - the actual tax obligation is created when the assessment is finalized and recorded in the county system. Make sure to print or save a PDF of the assessment page showing the date and amount as documentation for your records. I also wrote "Property Tax Prepayment - PIN #12345" in the memo line of my check as additional documentation. The IRS never questioned my deduction.

I believe you're confusing the safe harbor rules for estimated tax payments with property tax deductions. For property tax deductions, the tax must actually be assessed (imposed) to be deductible in the year paid. There's no safe harbor that allows you to deduct estimated property tax payments before assessment.

You're right, I misunderstood what my accountant was telling me. He was actually referring to using last year's property tax amount for estimated tax payment calculations, not for claiming the property tax deduction itself. Getting the tax terminology mixed up shows why I need an accountant in the first place lol. Thanks for the correction!

That's actually a really interesting approach I hadn't considered. Would I need some kind of formal appraisal to prove the collectible is worthless? Or would documentation of the scam be enough to claim the capital loss?

You don't necessarily need a formal appraisal, but you do need adequate documentation to prove worthlessness if audited. Documentation about the scam would be helpful, especially if you filed any kind of police report or complaint with consumer protection agencies. For collectibles specifically, getting a written statement from a reputable dealer in that type of collectible confirming it has minimal or no value can also be good supporting evidence. The key is showing that the loss of value is permanent, not just a temporary market fluctuation.

You would still eventually get the loss, but timing matters. If you contribute the property and the partnership later liquidates giving you nothing, you'd recognize a loss equal to your remaining basis in the partnership interest (which started at $1,000 but could be adjusted by partnership operations over time). The issue with contributing property with built-in loss is that Section 704(c) requires the built-in loss to be allocated to the contributing partner when the property is sold or otherwise disposed of by the partnership. But you don't lose the loss entirely - it's just a matter of when and how you get to claim it.

17 Have you run into any issues with the FIRE system rejecting files? I tried it once and got frustrated with all the format requirements and ended up just paying a service.

22 The FIRE system can be finicky about formatting, for sure. The most common rejection issues I've encountered were with TIN/name mismatches and control sequence errors in the file. My advice is to run the file through their test system first before submitting - that catches most formatting problems. Once you get a clean template working, you can reuse it year after year. The learning curve is steep but worth it if you're doing this regularly and want to avoid service fees.

14 I used the Excel 1099 service last year and it was decent for a small number of forms (I did about 25). The integration is pretty seamless if you're already using Excel. It's not the cheapest option though - I think I paid around $3.50 per form plus e-filing fees. And it doesn't handle state-specific forms, so I still had to do those separately. Might be worth looking at if you're only doing federal 1099-NECs and already have everything in Excel format.

2 Thanks for the info! I might check it out for next year. For now I'm going with Tax1099 since several people recommended it and it handles the state forms too.

But what if the employer filed something on their end showing you as an employee? Couldn't that create a mismatch with your return?

Companies only file W-2s for employees who received wages. If you earned zero dollars, there's no W-2 generated, so there's nothing that would create a mismatch with the IRS. The employer might have you in their system as an employee for their own records, but they don't report anything to the IRS until they actually pay you. So there's no risk of a mismatch or triggering a flag in the system.

Thank you! This is exactly what I needed to know. I didn't get any payment or benefits from them in 2024, just filled out the paperwork. I'll just report my main job income for now and include the second job on next year's taxes when I actually start getting paid.

What about if you got like a signing bonus in December but don't actually start working until January? Would that count for this year's taxes?