


Ask the community...
Has anyone used TurboTax to handle wash sales? I'm not sure if I should input each transaction manually or if it can import everything correctly from my trading platform. Last year it seemed to mess up some of my cost basis calculations.
I used TurboTax last year and it handled the 1099-B import fine, but it doesn't really explain wash sales well. It just takes whatever wash sale adjustment your broker reports. If you disagree with your broker's calculation (like OP's situation), TurboTax won't help you figure that out - you'd need to make manual adjustments. I switched to TaxAct this year and it seems to handle it a bit better with more explanations about the wash sale calculations.
Thanks for the info about TurboTax. I'm concerned about the imports because my broker (Fidelity) sometimes categorizes things differently than TurboTax expects. I hadn't considered TaxAct - might check that out instead. Really just want something that will handle the calculations correctly without me having to become a wash sale expert. The whole "substantially identical securities" thing gets really confusing especially with ETFs that have overlap.
Slight tangent but could someone explain how the wash sale rule works with tax-advantaged accounts? I've heard conflicting things about whether selling at a loss in my taxable account and then buying in my Roth IRA triggers a wash sale.
Yes, buying in your IRA after selling at a loss in your taxable account does trigger a wash sale! This is a common misconception. If you sell a security at a loss in your taxable account and purchase the same or "substantially identical" security in your IRA (Roth or Traditional) within 30 days before or after, the wash sale rule applies. What makes this particularly painful is that when the loss is disallowed due to an IRA purchase, that loss is essentially lost forever since you can't adjust the cost basis in an IRA.
Just a thought - have you tried calling your employer's payroll department? I work in HR and we occasionally make this mistake when coding special payments. Usually it's a simple data entry error where someone selected the wrong box in the payroll system. Most companies are happy to issue a corrected 1099-MISC because they don't want incorrect information reported to the IRS either. This would solve your TurboTax issue completely since you'd have a properly coded form.
I did try contacting them first actually! Their payroll person said they'd "look into it" about two weeks ago but I still haven't received anything. That's why I'm trying to figure out how to work around it in TurboTax since the filing deadline is getting closer.
That's frustrating! If you've already tried contacting them, I'd recommend following up one more time with a deadline - something like "I need this corrected by next Friday to file my taxes on time." Sometimes that creates more urgency. In the meantime, the workaround suggested by others is your best bet. Enter it exactly as shown on the form (so dollar amounts match IRS records) but add detailed notes explaining the discrepancy. The total income reported is what matters most from a tax calculation perspective.
Has anyone actually had the IRS question something like this before? I'm dealing with a similar situation (bonus incorrectly reported in Box 1) and I'm worried about getting in trouble for something that wasn't my fault.
I work with taxes (not a professional, just at a community volunteer center) and see this kind of thing often. Generally, the IRS is concerned with whether all income is reported, not necessarily which box it appears in on a 1099. As long as you include the income and document the discrepancy, it rarely causes problems.
There's another option that nobody has mentioned yet. If the property will be used as the buyer's residence AND the sale price is under $1 million, the withholding rate is reduced from 15% to 10%. Also, if your coworker has owned and used the property as her main home for at least 2 of the last 5 years, she might qualify for the primary residence exclusion, which can exclude up to $250k of gain from taxation ($500k for married couples). The realtor is giving terrible advice. Selling below market value is literally throwing money away.
Does the primary residence exclusion apply to nonresident aliens too? I thought that was only for US citizens and residents.
You're right to question this - the primary residence exclusion actually doesn't apply to nonresident aliens. I should have been more clear about that. While US citizens and resident aliens can exclude up to $250k/$500k of gain on a primary residence, nonresident aliens generally cannot take advantage of this exclusion. However, the reduced withholding rate (10% instead of 15%) for properties under $1 million that will be used as the buyer's residence still applies regardless of the seller's status. This is just for the withholding amount though, not the final tax liability.
I was in this exact situation last year. Tell your coworker to file IRS Form 8288-B BEFORE closing to request a withholding certificate for a reduced amount based on her expected actual tax liability. You'll need: - Copy of purchase contract - Estimated closing statement - Proof of her basis in the property (original purchase price + improvements) - Calculation of expected gain It takes 2-3 months to process so start ASAP! If the sale needs to happen before approval, she can still get a refund by filing a tax return, but having thousands tied up with the IRS for months isn't ideal.
Can u file the 8288-B yourself or do u need a tax preparer to do it?
14 Former municipal tax office worker here. This happens more often than you'd think. School districts and municipalities sell delinquent tax accounts to improve their immediate cash flow rather than waiting to collect. Unfortunately, once it's sold, you do have to deal with the collection agency. However, there's a possible solution: ask your employer for a formal letter acknowledging their error in not withholding the proper taxes. With that documentation, you'll have a much stronger case when you call the collection agency. Request to speak to a manager (not just a frontline rep) and explain that you're willing to pay the base tax immediately but not the fees due to employer error. In my experience, many agencies will waive at least part of the fees if you're willing to pay the base amount immediately.
5 Would filing a complaint with the state tax board help in this situation? I've heard they sometimes intervene in collection disputes.
14 Filing a complaint with the state tax board might help, but it usually takes time - often weeks or months. It's worth doing if other approaches fail, but I'd try direct negotiation first. That said, some states do have specific regulations about what collection agencies can charge for tax debts. Check your state's department of revenue website for information about third-party tax collectors. Some states require these agencies to register and follow specific guidelines, which might include limits on fees they can charge.
2 Is anyone else concerned that your employer messed up and YOU have to pay the penalty? I'd definitely talk to HR/payroll because this is their mistake. I had something similar happen with state income tax a couple years ago and my company reimbursed me for the penalties after I proved it was their withholding error. Don't just accept those fees without pushing back!
9 Absolutely! Document everything and take it to your employer first. When this happened to me, my HR department initially brushed me off, but when I escalated to the company controller and showed the withholding discrepancy on my pay stubs compared to the tax requirement, they covered the penalties. Companies have insurance for payroll errors for exactly this reason.
Sophie Hernandez
Do you have any employees for your food truck? If so, you might need to file employment tax forms like 941 quarterly and W-2s annually. Also, if you made estimated tax payments throughout the year, make sure to include Form 1040-ES information on your return.
0 coins
Daniela Rossi
ā¢And if the food truck LLC has inventory, you might need to account for cost of goods sold on your Schedule C. This is super important for food businesses since your ingredients and supplies are considered inventory.
0 coins
Ryan Kim
One more thing - since you donated to charity, you can deduct up to $300 as a cash contribution directly on your 1040 even if you don't itemize deductions. For 2021 they kept this special rule from the COVID relief bills. Anything over $300 would require itemizing with Schedule A.
0 coins