Does FreeTaxUSA handle state taxes too? And how much harder is it to manually enter all the stock stuff? I have like 6 different RSU vesting events plus some sales.

Yes, FreeTaxUSA does handle state taxes, but there's a small fee for state filing (around $15 last I checked) while federal filing is free for almost any tax situation. Manually entering the stock information isn't terribly difficult, just more time-consuming. For 6 RSU vesting events plus sales, I'd estimate it might take you an extra 30-45 minutes compared to an automatic import. The interface walks you through each entry systematically. The main thing is to have all your Fidelity statements organized before you start. I personally think the money saved is worth the extra time, especially if you're comfortable with basic investment terminology.

This explains so much! I got double-taxed last year and couldn't figure out why. How do you ensure TurboTax calculates this correctly? Is there a specific form or section where I need to verify this?

The key is to make sure your cost basis is correctly set when you enter the stock sale information in TurboTax. When you sell RSU shares, your cost basis should be the market value of the shares on the vesting date (the amount that was already included in your W-2 income). TurboTax Premier should handle this correctly if you import directly from Fidelity, but always double-check! Look for the section where it shows your capital gains/losses from stock sales. The "cost basis" column should match the value of your shares on the vesting date, not zero. If the cost basis is wrong, you can manually adjust it. This ensures you're only paying capital gains tax on the change in value since vesting, not on the entire sale amount.

What documentation did you show for the business vs personal use percentage? Did you still track every trip or just estimate based on the typical usage pattern?

I used a combination of methods. I didn't log every single trip, but I did keep good records of my regular business travel patterns. I maintained a work calendar with client appointments and locations, and I'd note my starting/ending odometer readings for those days. For recurring trips (like going to the same client site every Tuesday), I documented the mileage once and then used my calendar to show how many times I made that trip. My tax guy said this is acceptable as long as it's consistent and reasonable. The key was being able to show both the business purpose and the frequency/pattern of travel. I also kept all maintenance records showing odometer readings which helped establish total miles driven.

I went through an audit two years ago where they questioned my vehicle expenses. I had used the actual expense method but my documentation was pretty spotty. The auditor disallowed about 30% of my deduction because I couldn't adequately prove my business use percentage. They wanted to see contemporaneous records (created at the time of the trips), not just estimates after the fact. My advice: start keeping better records NOW, even if you haven't been doing it before. Apps make it much easier these days.

Wait, I thought Section 1231 losses always get ordinary loss treatment regardless of holding period? Isn't the 1 year+ holding period just for determining if gains get capital gains treatment? I've been doing my taxes wrong if that's not the case!

You're right that Section 1231 losses are treated as ordinary losses regardless of holding period. I should have been more precise in my explanation. What I was referring to is that to qualify as Section 1231 property in the first place, the property must be used in a trade or business and held for more than 1 year. Since the OP has held it for 2 years as a rental, it qualifies as Section 1231 property. If it had been held for 1 year or less as a rental, it wouldn't qualify for Section 1231 treatment, and would instead be subject to ordinary income/loss rules for property not used in a trade or business.

I actually haven't heard of cost segregation before. That sounds really useful! Is it something I could still do now even though I've already been depreciating the property as a whole for 2 years? Or is it too late to change how I've been handling the depreciation?

That's a really good question! I've actually been wondering about that too. My initial plan was to have everything under one LLC for simplicity, but now I'm second-guessing if that's the best approach. Did your tax person explain any specific benefits to having them separate?

The main reason he gave was liability protection. If someone sues your property management business, they could potentially go after your personally owned properties if they're in the same LLC. With separate LLCs, there's a stronger legal separation. From a tax perspective, he mentioned it can be cleaner for accounting and if you ever want to sell either business. Also said it might give more flexibility with how you handle certain deductions and expenses. The downside is more paperwork and potentially higher costs for maintaining multiple LLCs depending on your state.

This is super important! I learned this the hard way in California. Was managing just two properties for family members and got hit with a fine because I didn't have the required real estate license. Rules vary by state but better to check before you get too far along.

Does claiming the Recovery Rebate Credit also trigger a review? I claimed that for a missing stimulus payment.

Recovery Rebate Credit can definitely trigger additional review, especially if the amount you're claiming doesn't match IRS records. The IRS is extra careful with these credits because there were a lot of issues with improper claims (both accidental and fraudulent) during the pandemic years. The good news is that even with the delay, you should eventually get the refund if you're legitimately entitled to it. But it might take 6-8 weeks instead of the usual 21 days.

Thanks for this info! I checked and I do have that PATH Act hold. Wish the "Where's My Refund" tool would just tell you this instead of the vague "still processing" message.