Thank you for bringing that up! I was worried about the holding period but wasn't sure what the requirements were. It's good to know I'm in the clear for long-term capital gains treatment. Question: Does the adjusted cost basis calculation change at all based on meeting the holding period requirements? Or is it still just adding back the ESPP discount amount that was already included in my W-2?

The adjusted cost basis calculation remains the same regardless of whether you met the holding period requirements. You still need to add back the discount that was included in your W-2 income. The holding period just affects how the gain is classified (long-term vs. short-term) and whether you might have additional ordinary income to report. With a qualifying disposition like yours, you only have the capital gain to worry about (proceeds minus adjusted basis). The fact that you held the shares long enough simplifies things because you'll get the lower long-term capital gains tax rate on your profits.

Does FreeTaxUSA really handle this well? I've been using H&R Block online and it's completely confusing for stock sales. I have to manually override everything. Might switch if there's something that handles ESPP sales better.

Would love to see your spreadsheet! I'm just starting the process and feeling overwhelmed by all the calculations.

For most businesses, you can amend payroll tax returns (Form 941-X) up to 3 years after the original filing date. So for 2020 Q2, if you filed on July 31, 2020, you have until July 31, 2023 to amend. For 2021 Q3 (the last eligible quarter), most businesses will have until October/November 2024 to file claims. The IRS did implement a moratorium on processing new claims from September 2023 to early 2024 due to fraud concerns, but they're processing claims again now. Just be aware that processing times are extremely long - currently 10-12 months is common.

Is the NAICS code really the same as what the IRS wants? I thought they had their own system.

The IRS business codes are based on the NAICS codes, but they're not always exactly the same. The IRS uses a simplified version with 6 digits instead of the full NAICS system. In most cases, the codes will match up well enough, but for absolute certainty, you should check the Schedule C instructions where the IRS lists all their official business codes. The NAICS search is just a quicker way to narrow down to the right category.

This is terrible advice. While it might not have mattered in your specific case, using inaccurate codes can definitely raise flags during automated screening. My brother got audited partly because he used a retail code for what was actually a service business. The deduction patterns didn't match typical businesses in that category.

Is there a specific way you recommend organizing the copies? Like should I scan them or is just photocopying enough? And how long do I need to keep these copies?

I personally scan everything and save it as a PDF on my computer AND in cloud storage (like Google Drive or Dropbox) for backup. Physical photocopies are fine too, but digital is easier to store. You should keep tax records for at least 3 years from the date you filed the return. That's how long the IRS has to audit you in most cases. If you have self-employment income or some other special situations, keep them for 7 years to be safe. I just have a folder for each tax year with all my documents, and I never delete them.

The simplicity is nice but like...what about peace of mind? I mailed mine regular mail last year and spent weeks stressing about whether it got lost. The $7 for certified mail seems worth it just to know it arrived.

That's a really great point about private loans! My girlfriend actually does have better credit than me (I had some credit card issues in my early 20s), so that might be another factor in favor of marriage. Do you remember roughly how much difference it made in your interest rates? And I hadn't heard about the FAFSA changes - that's super helpful to know! Do you know where I can find more details about those specific changes?

For us, the difference was about 1.2% lower interest rate when we applied jointly versus when I applied alone. On a $40,000 loan, that saved us thousands over the life of the loan. Your results may vary depending on the specific lender and both your credit profiles, but it's definitely worth exploring. For the FAFSA changes, you can find detailed information on the Federal Student Aid website. The biggest changes include fewer questions (down from 108 to about 36), expanded eligibility for Pell Grants, and changes to how they calculate the Student Aid Index (formerly EFC). The income protection allowance is increasing by about 20%, meaning more of your income is shielded from financial aid calculations. They're also eliminating the "sibling discount" if you have siblings in college, which may or may not affect you.

Great point about employer benefits. Additionally, some industries have professional associations that offer scholarships. I got $3000 from my industry association that had nothing to do with my income or FAFSA.