This explanation makes sense but I'm still confused about one thing - when I'm entering info into TurboTax, does it want me to enter the full carryover amount from my previous return, or just the original capital losses from each specific year? The input screen is confusing me.

When entering information into TurboTax, you should enter the carryover amount shown on your previous return's Capital Loss Carryover Worksheet. You're not re-entering the original capital losses from each specific year - those have already been accounted for in the carryover calculation from previous returns. TurboTax specifically wants the carryover amount that was calculated at the end of your 2024 return, which should represent all your accumulated unused losses. Think of it as a single number that represents your "capital loss balance" that you're bringing forward, not as separate loss events that you need to track individually.

YES! This happened to me when I switched from TurboTax to TaxAct. The Capital Loss Carryover Worksheet looked completely different and I realized I had been entering my carryover amounts wrong for YEARS. I had to go back and look at my old returns and realized I'd been shorting myself by not carrying over short-term and long-term losses separately. Cost me like $900 in refunds I could have had.

Thanks for confirming I'm not crazy! I went back and checked my old returns and realized the issue. H&R Block was combining my short-term and long-term carryover losses into one field, but FreeTaxUSA tracks them separately. Once I separated my carryover amounts correctly (about 60% was short-term, 40% long-term based on my trading history), the worksheet finally showed the correct total amount.

Do you ever find yourself overpaying with this method? I'm worried about giving the IRS an interest-free loan if I calculate too conservatively.

I do sometimes end up overpaying slightly, but I personally prefer that to underpaying and facing penalties. In years when I've overpaid, I just apply the refund to next year's estimated payments. If you're concerned about overpaying, you might want to be more precise in your calculations. I typically use a rough estimate of my marginal rate plus state taxes (about 35% in my case), but you could use tax software to run a more accurate projection after each significant trade to get closer to the exact amount.

The quarterly tax system is technically "pay as you go," so each payment should reflect your income for that quarter. If you have minimal gains in early quarters and then a big gain later, you would make a larger payment for the quarter when you had the gain. You don't need to retroactively adjust earlier quarters.

This is super helpful, thank you! I just checked again and found that section buried in the menus. You're right - the questions were there, but the software didn't prompt me to go through that section when I entered my 1098 information. I had to manually navigate to it. Is there any way to know what other important tax questions might be hidden like this? I'm worried about what else I might be missing.

I'm glad you found it! Unfortunately, this is a common problem with most tax software - they have the capabilities to handle complex situations, but don't always guide users to the right sections. For major deductions like mortgage interest, medical expenses, and business deductions, I always recommend exploring all the sub-menus manually rather than just following the guided workflow. Another approach is to run a "review" of your return before filing - sometimes the software will flag potential issues like this during the review process. One last tip: if you've already filed with the incorrect mortgage interest deduction, you might need to file an amended return (1040-X) to correct it. Given the loan amount you mentioned, it could make a significant difference in your tax liability.

I've used FreeTaxUSA for years and actually had a similar experience. For my rental properties, they were super detailed, but for my primary residence mortgage over $750K, I had to figure out the limitation myself and manually adjust the deduction. I think they assume users know about this limitation, which is obviously not realistic for most people.

That's interesting about FreeTaxUSA handling rental properties well but missing this for primary residences. Maybe I should give them another look for my rental property taxes next year. I think the core issue is that all these software companies make assumptions about what the average user knows about tax code. The reality is most of us are using tax software precisely because we don't understand all these details and limitations! We rely on the software to guide us through everything relevant to our situation.

I tried setting up an IRS online account but got stuck at the ID verification part. It kept rejecting my driver's license photo. Any tips on getting past that?

I had the same issue with the ID verification initially. Make sure you're taking the photo in good lighting with no glare on your ID. Also, they're really strict about the photo quality - I had to use a different device with a better camera. If that still doesn't work, they offer an alternative verification process through ID.me that some people find easier. You can also request a mail verification code if the digital methods aren't working. It takes longer but it's more reliable if you're having technical issues with the photo verification.

This is a really important point. How do you know if you need to make estimated payments for next year? Is there some threshold?

Did you check the "Where's My Refund" tool during that time? If so, did it actually update properly or just stay on "received" the whole time?

The Where's My Refund tool updated at three points for me: showed "received" immediately after acceptance, changed to "approved" on day 6, and "sent" on day 7. The money showed up in my account the day after it showed "sent." My girlfriend's had a similar pattern, but took a couple days longer between each stage. The tool was actually pretty accurate for both of us.

Unfortunately complex returns with self-employment income always take longer. I'm an accountant and tell all my self-employed clients to expect 4-6 weeks minimum, sometimes 8 weeks if there are multiple schedules or unusual deductions.