Wait, really? I've been investing for 5 years and never knew this. So if my dividends automatically buy more shares, I need to add those amounts to my original investment when calculating gains/losses?

Exactly! When dividends are automatically reinvested to buy more shares, you've already paid income tax on those dividends in the year you received them. Those reinvested amounts become part of your cost basis. If you don't add them to your cost basis, you'll end up paying tax twice - once when you received the dividend, and again when you sell the shares (because your gain would appear larger than it actually was). This is especially significant for long-term holdings where years of reinvested dividends can substantially increase your true cost basis.

I've been using TaxAct for the last three years and it's pretty good with investments. You can import most 1099-B forms directly or enter them manually. Much cheaper than TurboTax but still gets the job done.

That's really interesting, I hadn't heard of this option before. Would this affect my credit score or have any long-term impacts? I'm worried about creating problems for myself down the road.

An Offer in Compromise itself won't directly impact your credit score the way debt settlement with private companies might. However, tax liens used to appear on credit reports (though the credit bureaus removed them from reports in 2018 as part of their National Consumer Assistance Plan). The bigger consideration is that the process is lengthy and there's a filing fee unless you qualify for a low-income exemption. During the review period, collection activities are generally paused, but interest and penalties continue to accrue. If your offer is rejected, you'll owe the original amount plus all accumulated interest and penalties. For most people with a $10k tax bill and regular income, a payment plan is usually more practical. The Offer in Compromise is more suitable for those with very limited income and assets who genuinely cannot pay their tax debt over time.

The HSA tip is gold! I managed to contribute $4,150 to my HSA for the previous year (did it in April before filing) and saved about $900 in taxes. Not enough to fix a $10k problem but every bit helps. For next year, def adjust your W-4 at your new job. When I started my new job I put "0" allowances and had them withhold an extra $100 per paycheck. Made a huge difference.

That's really helpful advice. What specific documentation did you end up needing? Just the stock purchase agreement or were there other forms the company needed to provide?

I needed several documents to satisfy the IRS. First, I had the company provide a letter stating the most recent 409A valuation and when it was conducted. Second, I had a formal stock purchase agreement with the buyer that included representations about the arm's length nature of the transaction. I also kept all email communications regarding the negotiation to show it wasn't pre-arranged. Additionally, I made sure the payment was properly documented with a wire transfer rather than cash or personal checks. Finally, I had my exercise documented through the company's equity management platform with timestamps showing when each transaction occurred.

Good point! Our company requires board approval for any stock transfers. Found that out the hard way when I tried to transfer some shares to my spouse last year.

Thanks for the suggestion about Form 8822. Do you know if they'll stop the current direct deposit if I file this form? I'm worried my refund will be sent to the wrong account before the form is processed.

Form 8822 won't stop a direct deposit that's already in process. It only updates your information for future interactions with the IRS. If your return is already being processed with the incorrect banking info, you really need to call them to intercept it before the deposit is attempted. When you call, specifically mention that you need to "cancel a direct deposit for a refund in process" - this sometimes helps get you routed to the right department faster. If they can't update the direct deposit info in time, they'll usually stop the electronic deposit and mail you a paper check instead.

The Where's My Refund tool is practically useless for these situations. It just shows "processing" forever and doesn't tell you if there's an actual problem. I had a direct deposit issue last year and the tool never updated until weeks after I had already resolved it by phone.

I haven't had any life changes like marriage or kids, but I didn't realize the tax laws had changed. Is there somewhere specific I should look at my return to see if that's affecting me? And yeah, my W-4 looks totally different than the last time I filled one out years ago. I'm confused about how to fill it out properly for next year to avoid this happening again.

The W-4 redesign definitely makes things confusing. The new form tries to be more accurate but requires more information. For your situation, pay special attention to Step 2 if you have multiple jobs (like your main job plus a side gig) - that's where a lot of people mess up. You probably need to look at your marginal tax bracket - when you got that promotion, you might have pushed some of your income into a higher tax bracket. The old W-4 wouldn't automatically adjust for that. The IRS has a Tax Withholding Estimator on their website that's actually pretty helpful for figuring out the right withholding amount.

Yes, there actually is! The IRS has something called "First Time Penalty Abatement" which they don't advertise much. If you've had a clean tax record for the past 3 years, you can often get penalties removed for a first-time issue. You just need to call them and specifically ask for this. You can also request abatement by writing a letter explaining if you had a reasonable cause for the underpayment - like if you had a major life change, calculation error, etc. They can be surprisingly understanding if you approach it the right way.