Is there any software that does this tracking automatically? Seems like a lot of manual work if you have monthly or quarterly vestings.

There are several options for automatic tracking. Most of the major brokerages (Schwab, Fidelity, E*Trade) have reporting features that attempt to track this, but honestly they're often inaccurate for RSUs specifically. I've found that dedicated equity compensation tools like Carta, StockOpter, or even some features in tools like Personal Capital can help with tracking. There are also some newer fintech apps specifically for equity compensation, but I still recommend maintaining your own spreadsheet as a backup. Once you set it up initially, it only takes a few minutes to update each vesting period.

This is such an important point! My company does withholding at vesting but only at 22%, and I got hit with a huge tax bill my first year with RSUs because I didn't realize I needed to make estimated tax payments on the difference. The whole RSU taxation system is unnecessarily complicated.

Many people don't know exactly what their annual income will be until late in the year, especially if they get bonuses or have variable income. It's pretty common for people to contribute to Roth IRAs throughout the year and then discover at year-end that they've exceeded the income limits, requiring a recharacterization.

Exactly what the other commenter said - we contribute monthly to our IRAs throughout the year, and we didn't realize until December that a bonus and some unexpected consulting income had pushed us over the limit. By then we had already made full contributions to our Roth IRAs for the year. Honestly, we'd never had to do a backdoor Roth before, so the whole process was new to us. Next time we'll just contribute to Traditional and convert right away since our income will likely be over the limit again.

How far back should you check your SSA records? Just the current year or should you go back several years to be safe?

You should definitely check at least the past three years. Identity thieves sometimes start small to see if you notice before ramping up their activity. In my case, they had actually used my information for almost two years before I caught it. Also, while you're on the SSA website, set up account notifications so you'll be alerted to any future changes or activity. This way you'll know immediately if someone tries to use your SSN for employment again.

This happened to me! In my case, PayPal had counted some transactions twice. Also, they were counting the full amount of money that moved through my account, including stuff that wasn't income (like when friends reimbursed me for group purchases). You need to contact PayPal tax department specifically, not just regular customer service, and request a corrected form.

Thanks for breaking that down! So basically, even though the extension was filed, I should have made an estimated payment by April 18th to avoid the failure-to-pay penalty? Is there any recourse now, or am I just stuck with these fees?

Exactly right. The extension only gives more time for paperwork, not payment. For future reference, always make your best estimate payment by the deadline even if your return isn't ready. As for recourse now, your best option is to request a First Time Penalty Abatement if you've had a clean tax record for the past 3 years. You can call the IRS directly or use the number on your bill to request this. The interest typically can't be removed, but the failure-to-pay penalty often can be if it's your first infraction. Just explain the situation with your accountant's poor communication, and they're usually pretty reasonable.

Not all tax software is created equal. I've used ProSeries and Lacerte professionally, and they have very different error checking capabilities. But honestly, good accountants should be manually reviewing returns anyway, not just relying on software to catch mistakes.

Do you think the size of the bank matters? I was leaning toward a local credit union, but wondering if a national bank might be better for a tax business specifically.

Size definitely matters, but there are pros and cons to both approaches. National banks typically offer more sophisticated online tools and wider ATM networks, which is helpful if you travel to meet clients. Credit unions often provide more personalized service and better rates, plus they're more likely to work with you if you have special circumstances. For a tax business where trust is paramount, having a relationship with a local banker who knows you can actually help build credibility with clients.

I switched from BoA to a local credit union last year. Best decision ever. The switch took about 2 weeks to fully transition recurring payments, but the savings and better service were totally worth it. Do it now before tax season hits and you get too busy!