That's really good advice about documenting my attempts to get the W2! I've been asking them verbally every week but haven't put anything in writing. I'll send an email today and keep a copy. I didn't know about checking the IRS website for electronically filed W2s. I'll definitely create an account and check that out. Would it show up there even if the restaurant owners are new to filing this paperwork? Maybe they submitted it correctly to the IRS but just didn't know they needed to give me a copy?

Yes, documenting your requests in writing is crucial. Save copies of your emails or get a receipt for any certified mail you send. This protects you by showing you made good-faith efforts to get your W2 properly. If they did file electronically with the IRS, it should eventually show up in your wage and income transcript, but there can be delays, especially during tax season. New business owners might indeed have filed correctly with the IRS but not realized they need to provide copies to employees. That happens more often than you'd think. The transcript approach is worth checking, but it might not show recent filings immediately - sometimes it takes weeks or even months for newly filed information to appear in your transcript.

Good point! When I had this problem in Michigan, I just attached a copy of the federal 4852 to my state return with an explanation letter. But my friend in California had to fill out a separate state form.

Thanks for breaking it down so clearly! So many websites don't specify the date cutoffs, which I think is why I was getting confused. Is there any scenario where I would have to take annual RMDs during the 10 year period, or can I definitely just withdraw on my own schedule?

You're welcome! There is one exception to be aware of: if the original IRA owner died after their required beginning date (generally April 1 of the year following the year they turned 72 or 73 depending on their birth year), AND they died after 2019, some tax professionals believe the beneficiary might need to take annual RMDs in years 1-9 while still emptying the account by year 10. However, the IRS has been unclear on this point, and many advisors are telling clients to just focus on the 10-year empty rule until clearer guidance is issued. Given the complexity, this might be a good question for your tax professional if you're concerned about it.

I used TurboTax last year for my inherited IRA situation. It does ask about inherited retirement accounts but doesn't give great guidance on the 10-year rule specifically. It calculated what I owed after I took distributions, but didn't help me plan the best withdrawal strategy. I ended up using their tax professional add-on service to talk through it with someone.

Does this mean I need to track the fair market value of EVERY item donated AND then track what price it ultimately sold for at the auction? That sounds like a bookkeeping nightmare. Is there any software people use to make this easier?

Yes, you definitely need to track both the fair market value (FMV) of each item and what it sells for at the auction. This is essential for proper tax documentation. The difference between FMV and selling price is what determines the tax-deductible portion for buyers. For software, many auction organizers use either spreadsheets or specialized auction management software like Greater Giving, Handbid, or GiveSmart. These platforms often have built-in features for tracking donations, FMV, and final selling prices. Some even generate basic reports you can provide to the charity. If you've already built a web app for the auction, you might consider adding these tracking features to your existing system.

Oh wow I never even thought about needing legal authorization to fundraise! Is this really required everywhere? Wouldn't this apply mostly to people who are taking a cut of the donations rather than volunteers sending 100% to the charity?

Thanks for mentioning this! I've been tracking my dividends and capital gains, but I wasn't clear about what specifically counts as "net investment income" for this purpose. Are there any other categories I should be including? And does the order of operations matter - like do I subtract other investment expenses before calculating the limit?

Net investment income generally includes interest, dividends, annuities, royalties, short-term capital gains, and long-term capital gains. It doesn't include tax-exempt interest (like from municipal bonds), so be careful not to include that. The order does matter. You'd subtract investment expenses other than interest (like management fees) first to arrive at your net investment income. Then that becomes your limit for deducting investment interest. Publication 550 has worksheets that walk you through the calculation step by step - I'd recommend following those closely. The form that tracks the carryover amount is Form 4952, which you'll need to file with your return when itemizing.

The itemized vs. standard deduction choice affects whether you can claim the investment interest deduction at all. Investment interest gets reported on Schedule A (Itemized Deductions). If you take the standard deduction instead of itemizing, you don't file Schedule A, so you don't get to claim any investment interest deduction. So the process works like this: 1. Calculate your potential investment interest deduction (limited to net investment income) 2. Add this to your other potential itemized deductions 3. Compare total itemized deductions to your standard deduction 4. Choose whichever is higher This is why the OP can't carry forward interest from a standard deduction year - they never claimed it on Schedule A in the first place.

Oh that makes sense! I was getting confused between the investment income limitation and the itemizing requirement. Thanks for clarifying!

That's interesting! My vintage business will be expanding to sell some digital patterns soon. Do you know if downloadable sewing patterns would be taxable in Colorado? Or would they count as a non-taxable service?

Digital products in Colorado are generally taxable if they're considered "tangible personal property" in electronic form - like downloaded patterns, designs, etc. However, custom design work or services are usually exempt. For your sewing patterns, they would likely be considered taxable digital goods in Colorado since they're standardized products rather than custom services. But other states vary wildly on digital taxation - some exempt all digital products while others tax everything. The rules change constantly too, which makes compliance a huge headache for businesses like ours.

I've been using TaxJar for about 2 years and it's decent but not perfect. It sometimes gets special district taxes wrong in Colorado which then requires manual adjustments. If you're only selling in a few states it might be overkill. Avalara is more comprehensive but also more expensive.