Does the withholding rate change if your income is higher? I make about $180k and my company withholds 37% on RSUs which seems excessive, but maybe that's correct?

Yes, the withholding rate does change at higher income levels. For supplemental wages (including RSUs) over $1 million, the mandatory withholding rate is 37%. For supplemental wages under $1 million, the employer can choose either a flat 22% rate or aggregate the amount with your regular wages and withhold at your normal income tax rate. If your company is withholding at 37% for all RSU vesting regardless of amount, they're using a conservative approach that will likely result in overwithholding for most employees. This isn't incorrect, just cautious. Some companies do this to ensure employees don't end up with unexpected tax bills. You'll get any excess back when you file your return, or you could adjust your W-4 on your regular paychecks to compensate.

Wow, I didn't even think about the state tax aspect! That could definitely explain part of the difference I'm seeing. I'll have to go back and look more carefully at my vesting statements to see the breakdown of federal vs state withholding. Thanks for pointing this out!

Happy to help! Also check if your company does any FICA (Social Security/Medicare) withholding on the RSUs too. Some companies handle this by withholding extra shares, while others might reduce your next regular paycheck to cover these taxes. That's another reason your "received" amount might be less than what shows up as income on your W2.

Can you explain more about this accountable plan thing? I've never heard of it and I'm currently paying my workers extra to cover their gas when they drive between job sites, which I know isn't ideal tax-wise.

An accountable plan is basically a formal arrangement where your business reimburses employees for business expenses without that reimbursement counting as taxable income to them. To qualify, you need three things: business connection (expenses must be job-related), adequate accounting (employees must provide documentation like receipts), and return of excess payments (employees must return any excess reimbursements). For your situation with gas between job sites, instead of paying extra taxable income, you could reimburse actual mileage at the IRS rate (currently 67 cents per mile for 2023). The employee doesn't pay tax on this reimbursement, and you still get the deduction. You'll need employees to track their mileage and submit documentation, but there are easy apps for this. Much better than grossing up wages to cover gas which creates additional payroll taxes for both you and the worker.

I use QuickBooks Payroll for my remodeling business with 7 employees. It's decent for basic payroll but struggles with complex construction-specific reporting. For certified payroll on government jobs, I ended up using an add-on called LCPtracker. The main benefit is how it ties directly to my accounting, but the reporting for construction specifically is mediocre.

Thanks for the insight on QuickBooks. Good to know about the limitations with construction reporting. Does it at least handle job costing well? I need to track labor costs per project really carefully.

Is there any way to get the penalties removed? The original tax amount is bad enough, but the penalties are what's making my balance completely unmanageable.

Yes, you can request penalty abatement through the IRS First-Time Penalty Abatement program if this is your first time having compliance issues. Even if you don't qualify for first-time abatement, you can request abatement for reasonable cause if your situation merits it (serious illness, natural disaster, or other circumstances beyond your control). The process involves writing a penalty abatement letter explaining your situation and why you believe the penalties should be removed. You'll need to specifically request abatement of the failure-to-pay penalty, which is likely a significant portion of what's been added to your original tax amount. The IRS looks at your prior compliance history and the efforts you've made to comply when considering these requests.

I used one last year and honestly regret it. Paid $4500 upfront and they basically just filled out the same forms I could have done myself. They promised they could settle my $40k debt for pennies on the dollar, but in the end, the IRS rejected their offer and I ended up on a standard payment plan anyway. Total waste of money in my experience.

Do you know if I have to specify which coins I'm selling for the tax loss? Like if I have 3 different cryptocurrencies all at a loss, can I pick which ones to realize losses on and keep holding the others?

Yes, you can absolutely specify which coins you're selling for tax loss harvesting. You're not required to sell all your underwater positions - you can strategically choose which specific coins and even which specific lots if you've bought the same coin at different times. If you have three different cryptocurrencies at a loss, you can choose to sell just one or two and keep holding the other. You might base this decision on which coins you're least confident about long-term or which would give you the biggest tax benefit. Some tax software lets you optimize this by showing which sales would be most beneficial.

Yep, same forms as stock trades. Form 8949 is where you'll list all your crypto transactions, and then the totals carry over to Schedule D. Make sure you check the correct box at the top of Form 8949 depending on whether the transactions were reported on a 1099-B. For most crypto exchanges in 2025, you'll likely check box C since many still don't issue 1099-Bs (though this is changing). Keep all your transaction records because the burden of proof is on you!

Not OP but I used FreeTaxUSA for crypto last year. It doesn't connect directly to exchanges like some premium services, but you can either enter transactions manually or import a CSV file if your exchange allows exports in that format. If you have tons of transactions, you might want to use a crypto tax service like CoinTracker or Koinly first to generate the required tax forms, then enter the summary into FreeTaxUSA.

Do they save your info from year to year? That's the only thing keeping me with TurboTax right now - I don't want to re-enter everything from scratch next year.

Yes, they definitely save your information year to year! You can import your previous year's return which pulls in all your personal info, employment info, etc. They even keep track of things like depreciation schedules and capital loss carryovers. The transition is pretty seamless if you're switching from another service too - just have a PDF of last year's return handy and you can pull most of the important info from there.