That's a really good point I hadn't considered. I'm in Tennessee which I think doesn't have state income tax, but I should double check how they handle capital gains specifically. Do you know if there's a good resource to check different state rules?

You're in luck with Tennessee! They don't have a state income tax on earned income or capital gains. They used to have something called the Hall Tax on investment income, but that was fully phased out as of 2021. I usually just google "[state name] capital gains tax rate" and look for the official state department of revenue website for the most accurate info. Each state has different rules and exemptions, so it's worth checking the official source.

That's not really helpful. People at all income levels have legitimate tax questions, and capital gains rules are complicated. Plus, we don't know OP's situation - they could have owned those properties for decades and this might be their retirement money.

You're right, sorry for the negative comment. Tax season makes me grumpy. I just get frustrated seeing the different tax rates for different types of income. Wishing everyone good luck with their filings.

Thanks for the breakdown! That's really helpful. Did you find it easy to switch to FreeTaxUSA after using TurboTax for years? Was there a learning curve?

There was a small learning curve switching to FreeTaxUSA, but nothing major. The interface isn't quite as polished as TurboTax, but all the same information is there. The biggest difference is that FreeTaxUSA doesn't push upgrades constantly, which was refreshing. One helpful thing is that FreeTaxUSA lets you import your previous year's return from TurboTax, so I didn't have to re-enter all my personal info. The actual filing process took maybe 15 minutes longer than TurboTax, but saving $70 was totally worth it to me.

This!! I accidentally paid $120 for TurboTax last year when I could've gotten it free. They're super sneaky about it. Always go through the IRS Free File page.

Do you happen to have that number handy? I'm having the same issue but with TaxCut software (which I think is also H&R Block?).

I don't have the exact number saved, but you can find it at the bottom of hrblock.com under "Contact Us" or "Support." Yes, TaxCut was H&R Block's older product name - they rebranded it to H&R Block software several years ago. So if you have TaxCut, that's definitely an older version of their software. You might want to check if it's still supported for this tax year. They typically only support the current and previous year's versions, so depending on how old your TaxCut software is, you might need to upgrade.

I'm having the same issue, but mine is from Target and the site looks a bit different than what was described. Does H&R Block use multiple download sites or should they all look the same?

You've got a good point about the total tax picture. I included sales tax in my second calculation which pushed it up to 12.54%, and I'm lucky to live in a state with relatively low income tax. California definitely hits harder with the state income tax. Do you feel like you get good value from the services your taxes provide there? I sometimes wonder if I'd be willing to pay more if I saw better infrastructure and public services where I live.

Regarding California value - it's honestly mixed. Some things are amazing like certain parks and public universities, but other infrastructure is crumbling. I think the issue isn't necessarily tax rates but efficiency of spending. Comparing to friends in Europe, they pay higher rates but seem to get more consistent services across the board. Here it feels like a patchwork where some things are world-class and others are embarrassingly bad. It's frustrating paying substantial taxes and still having to drive around potholes that have been there for years.

This is a bit misleading though. Very few people actually paid those high rates back then because there were way more loopholes and deductions. The effective tax rates weren't that different from today for most income levels. The tax code has been simplified in some ways, but the actual amount collected hasn't changed as drastically as just looking at the top rates would suggest.

That's an interesting approach I hadn't thought of. Would we need to establish actual IP value first? Our business is primarily service-based consulting, so I'm not sure what IP we'd be licensing.

Yes, you'd need to establish real IP value - it can't just be a paper arrangement. For a service-based consulting business, the IP could potentially be methodologies, frameworks, training materials, proprietary processes, or software tools used in the consulting. If your business truly doesn't have distinct intellectual property, this approach wouldn't work well. The IRS would see through an arrangement where fees are paid for nominal or non-existent IP. That's why proper valuation and documentation of the actual IP assets is critical.

This is actually what we did for our UK-based owner. The US entity pays the UK subsidiary for actual services, and our owner is a proper employee of the UK entity. Works well but you need proper substance in the foreign entity - can't just be a shell company.