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How to determine cost-basis for inherited SSHFX mutual fund from trust
So I inherited a pretty significant position in SSHFX mutual fund from my uncle who passed away around 2012. The assets were held in a trust until I finally received my portion in 2023 when I turned 30. Now I've got a job change coming up and need to liquidate these holdings, but the cost basis is showing up as "Not Available" in my brokerage account. I'm completely stuck on how to calculate the cost-basis for capital gains tax purposes. I briefly talked to a tax preparer, but they seemed confused about my situation and promised to look into it but never followed up. From what I can find online, the basis might be tied to my uncle's date of death or possibly 6 months after that? But I'm really unsure if that applies since the assets were in a trust for about 11 years before coming to me. I need to figure this out soon, and I'm really worried about getting it wrong and triggering an audit. Any advice on determining the proper cost-basis in this inheritance/trust situation would be incredibly helpful!
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Just found out my ex-employer never withheld state income tax all year... now what?
So I was going through my tax documents getting ready to file for 2024 and realized something really messed up. My employer from last year (quit in November) apparently didn't withhold ANY state income tax from my paychecks the entire time I worked there! I'm in complete shock right now. I know I'm going to be responsible for paying all of this myself, but I'm freaking out about how much I'll end up owing. My salary was around $68,000 and now I'm looking at a potentially huge tax bill that I wasn't expecting or budgeting for. I obviously should have checked my paystubs more carefully throughout the year, but it honestly never occurred to me that they wouldn't be withholding state taxes. Is there anything I can do to minimize the damage here? Can I report the company for this? Or am I just completely screwed and have to come up with all this money at once? Has anyone dealt with this before? I'm seriously stressing out about this.
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One thing nobody's mentioned yet - you should check if your employer at least withheld the correct federal income tax. Sometimes when they mess up state withholding, they screw up federal too. If they did withhold federal correctly, you might be able to apply some of your federal refund (if you're getting one) toward your state tax bill. Not all states allow this, but worth looking into. Also, make sure you keep all documentation showing your employer didn't withhold properly. If you end up getting hit with penalties, having this paper trail could help you get them reduced.
How would you even check if federal withholding was done correctly? I'm looking at my W-2 and box 2 has federal income tax withheld, but I have no idea if it's the right amount.
You can do a quick check by comparing what was withheld to roughly 12-22% of your income (depending on your tax bracket). But the more accurate way is to run your numbers through a tax calculator or software. Just input your total income, filing status, and deductions - then compare the "federal tax liability" it calculates against what was actually withheld on your W-2. If they're roughly in the same ballpark (within a few hundred dollars), then your federal withholding was probably done correctly. If the withholding is significantly less than your expected liability, then you've got problems on both federal and state levels, which is a much bigger issue.
Has anyone successfully sued their employer for failing to withhold state taxes? My cousin is going through this exact situation and is considering small claims court for the penalties and interest he's being charged.
I looked into this when it happened to me. You probably can sue, but you'd need to prove they were negligent rather than it being a misunderstanding or paperwork error. Did your cousin explicitly fill out state tax withholding forms that were ignored?
He says he definitely filled out all the standard new hire paperwork including state tax forms. He even has copies that he saved. The company apparently just... didn't process them correctly? Or ignored them? Either way they admitted it was their mistake but are refusing to cover any of the penalties.
Are DoorDash and Instacart Side Hustles Bad for Taxes? Tax Warning (East Coast)
I got a weird response on Quora when I asked about becoming a delivery driver for DoorDash and Instacart. This person was super cryptic and just said I should "talk to an agent about how bad these side hustles are for taxes" without explaining anything. They made it sound like I'd be making some huge mistake. I've been googling for like an hour trying to understand what they meant, but I can't find anything specific about delivery gigs being especially terrible for taxes compared to other side jobs. I'm in New Jersey if that matters for state tax purposes. Does anyone know what potential tax issues they might be referring to with DoorDash, Instacart, and similar delivery gigs? Is there something specific about these jobs that makes them tax nightmares? Or was this person just being dramatic?
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DoorDash driver here for 3 years. The tax situation isn't as scary as people make it sound if you're organized. My advice: 1. Get a mileage tracking app RIGHT NOW (I use Stride) 2. Save 25-30% of everything you make 3. Take pictures of all receipts for hot bags, phone mounts, etc 4. Pay quarterly taxes if you make more than a few thousand Also, your car maintenance costs more than you think! That depreciation hits hard after a year or two of delivery driving.
Does the 25-30% include state taxes too or just federal? I'm trying to figure out exactly how much to set aside each week.
That percentage includes both federal and state taxes for most situations. If you're in a high-tax state like California or New York, you might want to bump it up to 30-35%. I'm in a medium-tax state and 28% has covered me completely. The exact amount depends on your overall income level and tax bracket when combined with any other jobs you have.
Do any of you guys use TurboTax for your delivery gig taxes? Or is there a better option for self-employed people? This will be my first year doing DoorDash and I'm worried about messing it up.
I've used both TurboTax Self-Employed and FreeTaxUSA for my delivery gig taxes. TurboTax is more user-friendly and asks specific questions about delivery driving, but it's expensive (around $120-150 for federal and state with self-employment). FreeTaxUSA handles 1099 income well too and costs way less (about $15 for state, federal is free), but you need to know which forms to fill out yourself.
Best business startup accounting and bookkeeping services for new entrepreneurs?
Hey everyone, I'm about to launch my first small business (a specialty coffee roasting company) and I'm feeling totally overwhelmed by the accounting/bookkeeping side of things. I've been using personal spreadsheets for my finances until now, but I know that won't cut it for an actual business. I'm trying to figure out whether I should use accounting software, hire a part-time bookkeeper, or go with one of those monthly service companies. My budget is pretty tight right now (aren't all startups?) but I also don't want to mess up my business finances from day one. Has anyone here used any services they really love? Any recommendations for someone just starting out who has zero accounting background? I'm especially nervous about setting everything up correctly for quarterly tax payments and keeping business/personal expenses separate.
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Don't overlook local resources! Many cities have Small Business Development Centers that offer free or very low-cost accounting setup help. I got free QuickBooks training through mine last year. They also connected me with a retired accountant who volunteers to help new businesses set up their books properly.
Where would I find these centers? Is there a website or something to locate the one nearest to me? This sounds perfect for my budget right now.
You can find your local Small Business Development Center through the SBA website - just search "SBDC near me" and it should pop up. They're usually connected to local colleges or economic development agencies. Most offer free initial consultations where they'll assess your specific needs and then connect you with the right resources. Ask specifically about their accounting workshops - many run monthly QuickBooks or general bookkeeping classes designed for absolute beginners. The SCORE program (also through SBA) can match you with a retired accountant or financial professional who volunteers as a mentor.
I'm going against the grain here, but I think paying for a professional bookkeeper from day one is worth every penny. I tried doing it myself and ended up with such a mess that it cost me $2,700 to have an accountant fix everything at tax time. Now I pay $275/month for a bookkeeper who handles everything. She catches potential issues before they become problems and actually helped me identify several tax saving opportunities I never would have known about. Plus the time I save not dealing with receipts and categorizing transactions is time I can spend actually making money in my business.
$275 monthly seems steep for a startup though... how many transactions do you have? And did you find someone local or use an online service?
Tax Preparer Filed My Return with Fake Deductions - Need to Fix ASAP
I'm in a really desperate situation and need advice fast. I work a regular job with a W-2 but also do some real estate work on the side (1099-NEC income). Based on a recommendation from a friend, I hired this tax preparer to handle my filing yesterday. Well, turns out this guy went absolutely WILD with fabricating expense deductions for my real estate business. I'm talking completely made-up expenses that have zero documentation or basis in reality. I just found out he already e-filed my return and it's been ACCEPTED by the IRS! The return he submitted shows I'm getting a refund of about $6,300. When I double-checked the numbers myself today with ACTUAL legitimate expenses, I should be owing around $3,800 to the IRS - which makes way more sense given my situation. That's over a $10K difference between what he filed and reality! I tried to submit a corrected return but got rejected because there's already one on file. I'm freaking out about what to do next. Should I file a 1040-X with accurate numbers? Submit a paper return to try to override what he e-filed? I'm worried about fraud penalties! Another major concern - if that incorrect refund check comes, about $550 of it automatically goes to this sketchy preparer as his fee. I doubt he'll give it back. Is there any way to stop that payment? I called the IRS and the representative mentioned they won't release refunds if there's a 1040-X pending, but not sure if that's accurate. Any help on fixing this mess would be greatly appreciated!
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Former tax professional here. One thing nobody has mentioned yet - you need to seriously consider firing this tax preparer in writing immediately. Send a certified letter stating you're terminating their services due to the unauthorized and potentially fraudulent deductions they included on your return. Also, were they a CPA, Enrolled Agent, or just someone who prepares taxes? The credentials matter for reporting purposes. If they have professional credentials, you should also report them to their governing body (state CPA board, etc.). For the immediate situation with the incorrect return, file both Forms 14157 and 14157-A to report the preparer AND file your 1040-X as soon as possible.
The guy is just some local tax preparer - not a CPA or EA as far as I know. He was recommended by a friend who said he "gets great refunds for everyone." Should have been a red flag right there! Do I still use those same forms to report him even if he's not credentialed?
Yes, absolutely use those same forms even though he's not credentialed. The IRS needs to know about all tax preparers who engage in misconduct, regardless of their credentials. Form 14157 is specifically designed to report any tax preparer who violates tax laws or engages in unethical practices. The fact he's known for "getting great refunds for everyone" is definitely concerning and suggests a pattern of improper deductions. Make sure you mention that in your report, as it indicates this may not be an isolated incident. The IRS may look into his other clients' returns if they suspect a pattern of fraudulent activity.
Something similar happened to my brother last year. The key thing nobody's mentioned is to print out and KEEP copies of both returns - the fraudulent one that was filed and your corrected version. When you file the 1040-X, attach a detailed letter explaining the situation. In my brother's case, the IRS actually called him for clarification (yes they sometimes actually call!) because the difference was so large. Having documentation ready made all the difference. His fraudulent preparer had claimed like $12k in fake business expenses.
Wait the IRS actually called your brother? I thought they only communicate through mail. Was it legit? I always heard to be super careful about scam calls claiming to be the IRS.
QuantumQuasar
Another option that nobody has mentioned yet is to check if your brokerage offers basis reconstruction services. Fidelity helped me with a similar inheritance issue by researching historical prices based on the date of death. You'll need to provide documentation like the death certificate and proof of the trust distribution, but they can often do the calculation for you. There might be a fee, but in my case it was worth it for the peace of mind.
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Liam McGuire
What if my brokerage is a smaller one that doesn't offer those kinds of services? I'm with a regional firm that's not as full-service as Fidelity or Schwab.
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QuantumQuasar
If you're with a smaller brokerage, you still have options. Even if they don't offer formal basis reconstruction services, their customer service might still be able to help you identify the share price on the date of death. If that doesn't work, you can also use resources like Yahoo Finance or Morningstar to look up historical prices for most mutual funds. Just search for SSHFX and find the historical price data for your uncle's date of death. Document how you determined the value (take screenshots), and keep that with your tax records.
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Amara Eze
Have you considered using the alternative valuation date? IRS rules allow the executor to choose either the date of death OR 6 months after for valuation purposes. Might be worth checking which value was lower if youre trying to minimize capital gains taxes when you sell.
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Giovanni Greco
This is actually a really good point. The executor had to choose one valuation method for ALL assets in the estate though - they couldn't cherry pick different dates for different assets. So you might want to check what method was used on the estate tax return if one was filed.
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