Thanks for mentioning Form 4852 - I hadn't heard of that one! Do you know if I need to wait for the company to refuse to give me a W2 first, or can I just file the 4852 right away? I doubt they're going to be cooperative since they're already ignoring my messages after I told them about the SS8 determination.

You don't necessarily need to wait for them to refuse. If they're already ignoring your communications, that's basically a de facto refusal. You can proceed with Form 4852 right away. On the form, you'll need to explain how you determined the wage amount - just reference your 1099 forms, payment records, and the SS8 determination. The key is documenting that you made a reasonable effort to get the correct W-2 from them. Even a quick email requesting it (with no response) is enough to show you tried.

This is really important! My old company did this - they withheld some taxes but still gave me a 1099. When I got my SS8 determination, I discovered they had withheld taxes but never submitted them to the IRS! It created a huge mess.

I've thought about going to a professional, but I was hoping to avoid the expense since my return is otherwise pretty straightforward. Do you think the cost is justified just for handling the large number of forms? How did you find a CPA that specializes in high-volume trading?

In my experience, it's absolutely worth it when you have hundreds of transactions. Besides handling the volume, a good CPA can often find deductions or strategies you might miss. I found mine by asking in a traders' forum for recommendations in my area. The real value comes when you have an unusual situation like this. Consumer software is designed for typical tax situations, not edge cases like hundreds of transactions. Most CPAs charge based on complexity, so while the trading forms increase the cost, the rest of your straightforward return helps keep it reasonable.

I did this with H&R Block Premium last year. You need to format your spreadsheet exactly to their template, but once that's done, it imports everything cleanly. I had around 175 transactions and it worked without crashing. Way better than manual entry.

Thanks so much for your perspective! Do you use any specific apps or methods to track your business expenses throughout the year? That's something I need to get better at.

I use QuickBooks Self-Employed which syncs directly with TurboTax. It connects to your bank account and credit cards to automatically categorize expenses. You can also snap pictures of receipts with your phone and it stores them digitally. Makes tax time super easy because everything is already categorized. Another simpler option is just a dedicated business credit card for all business purchases, then download the annual statement. For your size business, even a spreadsheet would work if you're diligent about updating it. The key is separating business and personal expenses completely - that's what will save you headaches later.

Does FreeTaxUSA actually handle Schedule C and all the business deductions properly? I've been paying for TurboTax Self-Employed ($120 last year!) and would love to find something cheaper.

Schedule D has a worksheet in the instructions called the "Capital Loss Carryover Worksheet" that you should fill out each year. It's not submitted with your return, but it's the official way to calculate your carryover amount. Keep it with your tax records! There's one for 28% rate transactions and another for regular transactions. You can find it in the Schedule D instructions PDF on the IRS website.

Thanks for the tip! I didn't realize there was an official worksheet in the Schedule D instructions. I'll definitely download that and start using it instead of my homemade spreadsheet. Makes sense they'd have something for this since so many people carry losses forward, especially after market downturns.

I've noticed this too! The difference is usually because the summary screen might be showing your net capital loss after offsets, while Schedule D shows the detailed breakdown. Check Form 1040 line 7 to see the actual amount of loss being applied against your income this year (max $3k). The software is probably right, but it's showing you different stages of the calculation.

Is there any strategy to minimize that depreciation recapture hit? I've got two syndication deals and just realized I'm building up a big tax bill for the future when they sell.

The most effective strategy is a 1031 exchange, which allows you to defer both capital gains and depreciation recapture taxes by rolling your proceeds into another "like-kind" property. However, this is complicated with syndications since you don't control the decision to sell or exchange. Some syndication sponsors offer 1031 options where you can roll your portion into their next deal, but not all do. Another approach is continuous investing - as one syndication sells (triggering tax), you're simultaneously generating new paper losses from new investments to help offset the hit. This requires careful timing and planning. Some investors also increase their passive income streams before a syndication sells, so they can utilize any remaining suspended passive losses to offset the recapture. This could be through additional real estate investments or even passive business activities.

I'm invested in 5 different syndication deals that all did cost seg studies. The paper losses absolutely compound and create a bigger total passive loss pool. There's no limit to how many properties you can take accelerated depreciation on, but remember that your ability to use those losses still depends on having passive income to offset.