Can you explain how tax loss harvesting would work with RSUs? I'm in a similar situation with some underwater tech stocks I could potentially sell, but I wasn't sure if there were special rules for harvesting losses against RSU gains.

Tax loss harvesting works the same with RSU gains as with any other capital gains. If you sell investments at a loss, those losses can offset your capital gains dollar-for-dollar. So if you have $10,000 in capital gains from your RSU sales and sell other investments at a $6,000 loss, you'd only pay taxes on $4,000 of net capital gains. Just be careful of the wash sale rule - don't buy substantially identical securities within 30 days before or after selling at a loss, or you can't claim the loss for tax purposes. This applies across all your accounts, including retirement accounts, so it's easy to accidentally trigger if you're not careful.

This is great advice. My company offers this too and I had no idea until HR mentioned it during a benefits review. Saved me from having to calculate quarterly estimated payments.

This doesn't sound right. Isn't it more about who the child lives with and who provides support? I'm pretty sure the IRS has specific residency tests that don't require legal adoption or guardianship.

I think I might have been wrong or my tax preparer was confused. I just looked it up on the IRS website, and you're right - the main test is about residency and support, not legal guardianship for the qualifying child test. The child needs to have lived with you for more than half the year and you need to provide more than half their support. There's also a relationship test, but it includes any child who lived with you in a parent-child relationship. Legal adoption or guardianship would make things clearer, but they're not strictly required if you meet the other tests. Sorry for the confusion! This is why I usually pay someone to do my taxes.

What tax software did you use that allowed you to claim a non-bio kid? I tried with TurboTax and it kept asking for adoption documentation or court papers.

I used H&R Block's online software. When it asked about the relationship, I selected "other eligible dependent" rather than "son/daughter" and then it walked me through the qualifying child tests. It asked if the child lived with me for more than half the year and if I provided more than half the support, both of which were true in my case. TurboTax should have a similar option. You might have been going down the wrong path in their question tree if it was asking for adoption papers. Try looking for the option about qualifying dependents rather than specifically entering the child as your son/daughter. The relationship test includes any child who lived with you in a parent-child relationship.

I pay $260 for mine which includes state and federal. Self-employed with a Schedule C, rental property, and some investments. I've been with my guy for 8 years though, so maybe I'm grandfathered into lower pricing. $375 does seem high for a basic W-2 return, honestly.

Thanks for the perspective! I might need to shop around more. I've been doing my own taxes with TurboTax but was thinking about switching to a professional this year since my situation got a bit more complicated with some freelance income and a home office. Sounds like I should expect somewhere in the $250-300 range for that complexity.

Check if you claimed the Earned Income Tax Credit or Additional Child Tax Credit. Those automatically get additional scrutiny and can't be issued before mid-February by law. My sister had that issue and didn't realize that was causing her delay.

Thank you so much for sharing your expertise! This confirms my suspicions. Would it raise any audit flags if we've submitted Form 4562 for many years and suddenly stop, even though we're still claiming depreciation on the same equipment?

Yes, it could potentially raise questions during a review or audit. Consistency in filing practices is something that the IRS looks at. When a business suddenly changes how they're reporting long-standing deductions, it can trigger closer examination. More importantly, Form 4562 provides the detailed documentation of your depreciation calculations. Without it, in the event of an audit, you'd need to provide alternative, equally detailed records showing how you arrived at the depreciation amounts claimed on your return. Having the form as part of your filed return establishes a clear record of your depreciation methodology.

I tried using the IRS interactive tools for my small business and found them frustratingly limited. They're okay for basic questions but not great for specific form requirements for business scenarios. For something like Form 4562, you'd be better off reading the actual form instructions directly from the IRS website.

Good point about state fees! Also, does anyone know if you can change your mind later? Like if we start as a partnership, can we convert to S Corp next year if we decide that's better?

Yes, you can absolutely change later. Many businesses start as partnerships for simplicity, then convert to S Corps when their profits justify it. The conversion is straightforward - you file Form 8832 to elect to be taxed as a corporation, then Form 2553 to elect S Corp status. Just be aware there are timing requirements. Generally, if you want S Corp status for a particular tax year, you need to file within the first 2.5 months of that year (or within 75 days of forming your business if it's a new entity).

This is what tipped our decision for our handyman business. We needed to buy a lot of equipment the first two years, so we stayed as partnership. Year three we switched to S Corp once we were taking home steady money. Saved about $6k in SE taxes last year alone!