This makes so much sense! So basically each of our employers is calculating withholding like we're in a lower tax bracket because they only see their portion of our income? Now I understand why we keep owing despite claiming "0" on the old forms. If we both make roughly the same amount (I make about $115k and she makes about $108k), should we both check that box in Step 2(c) or just one of us? And do we still select "Married filing jointly" at the top?

Yes, you've got it exactly right! Each employer only "sees" their portion of your income, so they withhold at lower rates than what applies to your combined income. When your incomes are that close (both around $110k), you should only have one of you check the box in Step 2(c). If you both did it, you'd over-withhold by quite a bit. And yes, you should both still select "Married filing jointly" at the top of the form. The spouse with slightly higher income (you in this case) should be the one to check the box, while your wife's W4 should just have the filing status and nothing checked in Step 2.

This is actually pretty smart. No complex calculations, just fixing the shortfall directly. I might try this approach since my eyes glaze over with all the W4 worksheet stuff.

Would this apply if the stock options were from my employer where I'm just a regular W-2 employee? I don't have any self-employment income or a Schedule C.

No, unfortunately this wouldn't apply in your situation. Since you're a W-2 employee and these were personal investments (even though they were from your employer), you can't deduct these on Schedule C. This strategy only works for self-employed individuals where the investment is directly tied to their business operations. Your best approach is still to add the platform fee to your cost basis as mentioned in the earlier comments, which will reduce your capital gain amount.

I ran the numbers for my situation and it wasn't worth it. Had about $2,700 in investment interest but my total itemized deductions were still about $4k below the standard deduction. Plus you can only deduct investment interest up to the amount of your net investment income, which was another limitation for me.

Thanks for sharing your experience. I was thinking it might be the same for me - probably not worth the extra paperwork if I'm still better off with the standard deduction. Guess I'll stick with adding fees to cost basis where possible and not worry about trying to deduct the interest separately.

I think the Home & Business would actually be perfect for your situation with the online craft sales. It's specifically designed for people with a small business or self-employment income. The Deluxe version doesn't include all the business expense categories and Schedule C support that you probably need. Let me figure out how to get this to you without violating any terms of service. Might need to check what the other commenter mentioned about transfers not being allowed.

Thanks for the info! That makes sense about the Schedule C support. I didn't realize how many business deductions I might be missing with just the Deluxe version. Please let me know what you find out about transferring it.

I second this! Been using FreeTaxUSA for 3 years now. It handles my freelance work and investment accounts perfectly. Federal filing is free and state is only like $15. No idea why people still pay $100+ for TurboTax.

Wow I hadn't even thought about the insurance angle. Does adding commercial coverage to your policy affect what you can deduct for taxes? Like does it increase the standard mileage rate or anything? And did your insurance premium go up a lot when you added the commercial coverage?

Adding commercial coverage doesn't change your tax deduction options at all. The standard mileage rate remains the same regardless of your insurance type - it's set by the IRS annually. You can still choose between standard mileage or actual expenses. Yes, my premium did increase when I added rideshare/delivery coverage - it went up about $32 per month. But the good news is that additional insurance cost is deductible as a business expense if you're using actual expenses method! If you're using standard mileage rate, it's already factored in though.

Don't you need some kind of documentation to prove the 60% business use? I've always been afraid to claim phone expenses because I don't know how I'd prove it if audited.

Did you find any good resources for learning about rental property tax treatment? That's my biggest concern with switching from my CPA.

The IRS Publication 527 (Residential Rental Property) is actually pretty readable and covers the basics well. I also found the BiggerPockets forums invaluable for specific rental tax questions - there are both CPAs and experienced landlords who can help with real-world situations. For me, the key was learning about depreciation (which is usually the trickiest part) and keeping meticulous records of expenses. I created a simple spreadsheet where I track every expense by category, which makes tax time much easier. Most tax software has decent guidance on rental properties, but I found that learning the basic concepts first made the whole process less intimidating.

What kinds of deductions did you miss? I'm curious because I'm in a similar boat and wondering what I might be overlooking.