Has anybody used any specific brokerage that makes this stock transfer process easier? I'm with Fidelity and wondering if there's paperwork I need to fill out or if I can do it all online.

One thing to keep in mind that hasn't been mentioned yet - make sure you document everything properly for your records. When you gift stock, you'll want to keep records of the fair market value on the date of transfer (you can use the average of high and low prices for that day), along with your original purchase information. Also, if you're gifting shares worth close to the $19,000 limit, consider doing it earlier in the year rather than waiting until December. Stock prices can be volatile, and you don't want to accidentally exceed the annual exclusion if the stock appreciates between when you plan the gift and when you actually execute it. Your parents should also understand that they'll need this cost basis information when they eventually sell, so make sure to provide them with all the original purchase details - dates, prices, and any relevant documentation.

My company did the same thing! No code DD on my W-2 this year. I called HR and they didn't even know what I was talking about 🤦‍♀️ When I explained it was the health insurance cost reporting, they just said "we follow all IRS requirements" and brushed me off. Really frustrating when you're trying to understand your own compensation.

This is a really common issue that I've seen come up a lot lately. The code DD reporting requirement is still active under the ACA, but as others mentioned, it only applies to employers who issued 250 or more W-2s in the previous tax year. One thing to keep in mind is that if your employer changed payroll providers or went through a merger/acquisition, this could affect how they count towards that 250 threshold. Also, some employers mistakenly think this reporting is optional because there aren't heavy penalties specifically for missing code DD. If you want to find out your actual health insurance costs, you can also check your Summary Plan Description (SPD) or Annual Notice that your employer is required to provide. These documents usually break down the total premium costs. Your employee benefits portal might also have this information under plan details or cost summaries.

This whole system makes me so mad! I sold a truck last year for $12k less than I paid for it just 3 years earlier, and I get zero tax benefit. But my friend sold her vintage Mustang for a $9k profit and immediately got a tax bill. How is this fair??

I completely understand your frustration! This asymmetric treatment has bothered me for years too. What makes it even more maddening is that the IRS essentially treats your car purchase as "consumption" rather than an investment, so any decline in value is just considered normal wear and tear that you "consumed" through use. But here's something that might help: if you're planning to replace that car, consider whether you might use the new vehicle for any business purposes at all. Even small amounts of documented business use (like driving to meet clients, picking up supplies, etc.) can allow you to deduct the business portion of depreciation and eventual losses. You'd need to keep detailed mileage logs, but it's one of the few ways around this unfair rule. The key is establishing that business use pattern BEFORE you sell, not after. I learned this the hard way when I couldn't deduct a loss on a car I occasionally used for work but never properly documented.

Don't forget the standard deduction too! For 2023, a single filer gets $13,850 off their taxable income. So using the numbers above, final taxable income would be even lower: $43,410 - $13,850 = $29,560 So income tax would only apply to that amount, calculated through the progressive brackets. The effective income tax rate would probably be around 11-12% when all is said and done, plus the SE tax. It's waaaaay less than 37.3% when you factor in all the deductions!

This is exactly the kind of breakdown I needed when I started freelancing! One thing that really helped me understand this was setting up quarterly estimated tax payments from the beginning. Since you're looking at about $60k in net self-employment income, you'll want to pay estimated taxes quarterly to avoid underpayment penalties. The general rule is to pay 25% of your expected annual tax liability each quarter (due dates are typically Jan 15, April 15, June 15, and Sept 15). Based on the calculations others have shared, your total tax burden (SE tax + income tax after all deductions) would probably be around $12,000-15,000 for the year, so you'd want to set aside roughly $3,000-4,000 per quarter. Also, keep meticulous records of ALL business expenses throughout the year - mileage, home office costs, business meals, equipment, software subscriptions, etc. These deductions directly reduce your net SE income, which saves you money on both SE tax AND income tax. Every dollar in legitimate business expenses saves you about 37 cents in total taxes (15.3% SE + ~22% income tax bracket).

Honest question - what happens if you just don't file the 1041 in this situation? The tax on $650 would be tiny, and it seems like such a hassle for such a small amount. Has anyone just skipped it with small amounts like this?

I was in a very similar situation with my grandmother's estate last year - we had about $580 in dividend income and sold her home at stepped-up basis. Initially I thought we were under the $600 threshold and wouldn't need to file, but then we received a small final dividend payment of $95 that pushed us over. My estate attorney explained that once you cross that $600 income threshold, you're required to file the 1041 regardless of how small the amount is. The actual tax liability ended up being around $30, but the peace of mind was worth it. One thing that helped was that many tax software programs now handle Form 1041 for simple estates, so you might not need to pay your accountant the full amount if it's straightforward. TurboTax and FreeTaxUSA both have estate tax modules that can handle basic situations like yours. Given that you're just over the threshold with royalty income and stepped-up basis asset sales, it should be pretty straightforward to prepare.