Thanks for all the helpful responses everyone! I'm feeling much more confident about this now. Just to make sure I understand the process correctly: 1. Make the two credit card payments first (through approved payment processors) 2. Wait 1-2 days for them to process and show up in my IRS account 3. Use Direct Pay for the remaining balance One follow-up question - when I'm making the credit card payments, do I need to specify which tax form they're for? I filed a 1040 with a Schedule C, so I want to make sure the payments get applied to the right place. Also, is there a way to check online that all my payments have been properly applied before the deadline? The reward calculation definitely makes sense for my situation since I'm working toward a signup bonus on one card and have a 2% cashback card for the other payment. Even with the processing fees, I'll come out ahead.

Just wanted to chime in with my recent experience doing exactly this! I had a $6,200 tax bill last month and used two credit card payments of $2,000 each, then paid the remaining $2,200 through Direct Pay. A few practical tips from my experience: - Make sure you're using the official IRS-approved payment processors for credit cards (PayUSAtax, Pay1040, or Official Payments). Don't use any third-party sites that aren't listed on the IRS website. - Keep your browser open and take screenshots of each confirmation page immediately. I learned this after my first payment confirmation email got delayed by several hours. - The Direct Pay system is really user-friendly and will show you your updated balance after the credit card payments post, which took about 36 hours in my case. One thing I wish I'd known ahead of time - if you have a business checking account, you can also use that for Direct Pay as an additional option if needed. Might be helpful if you hit any daily limits on your personal account. The whole process was much smoother than I expected, and getting those credit card rewards definitely made the convenience fees worth it!

Just wanted to add another perspective on this - I went through the exact same confusion with my NQSO sale last year. The key thing that helped me understand it was thinking of it as two separate transactions that happen to be reported on different forms: 1) The "exercise" transaction: You paid $20K to buy stock worth $92K. The $72K difference is compensation income (goes on W-2). 2) The "sale" transaction: You sold stock with a basis of $92K (your $20K cost + $72K already-taxed income) for $92K in proceeds. When you think of it this way, it makes sense that there's essentially no capital gain or loss on the sale - you're just converting already-taxed compensation income into cash. The tricky part is that most employers don't adjust the cost basis on the 1099-B to reflect the W-2 income, so you have to do it manually when filing. This is super common with NQSOs, so don't worry - you're not missing anything obvious, the reporting is just confusing by design!

Just wanted to share my experience since I went through this exact same situation with NQSOs last year! The confusion you're experiencing is totally normal - the way stock options are reported across multiple forms is genuinely confusing. You're absolutely right to be concerned about double taxation, but the good news is that once you make the proper adjustments, you won't pay tax twice on the same income. Here's what I learned: The $72K that shows up on your W-2 represents the "bargain element" - essentially the difference between what the stock was worth when you exercised ($92K worth of stock) and what you paid to exercise the options ($20K). This gets treated as regular compensation income. The 1099-B is reporting the stock sale, but the cost basis needs to be adjusted to reflect that you already paid tax on $72K of that value through your W-2. So your true cost basis for tax purposes should be $92K ($20K you paid + $72K already taxed), not just the $20K shown on the form. When you file, you'll likely need to use Form 8949 to make this basis adjustment. Most tax software will guide you through this when you indicate you have stock compensation income. The end result should be little to no capital gain or loss from the actual sale, since you sold immediately after exercising. Don't stress too much - this is a very common situation and the IRS sees these adjustments all the time with employee stock options!

Don't forget to consider whether you actually NEED to file a 1065 at all. If you're a foreign partnership with no US source income, no US partners, and no effectively connected income with a US trade or business, you might not even have a filing requirement. The business being registered in Delaware doesn't automatically create a filing requirement if the actual business activities don't have US connections.

Based on your situation with a Delaware LLC and foreign partners, I'd recommend a two-step approach to keep costs down while ensuring accuracy: 1. First, use one of the AI guidance tools like taxr.ai that others mentioned to understand exactly what information you need for the foreign partner K-1s and withholding requirements. This will help you prepare properly before using any filing software. 2. Then use FreeTaxUSA ($60) or TaxHawk ($55) for the actual filing. Both have decent interview processes for partnerships, but having clarity on the foreign partner aspects beforehand will make the process much smoother. Since you're operating at a loss with minimal activity, the return should be relatively straightforward once you understand the foreign partner reporting requirements. The key is making sure you properly identify your foreign partners and handle any required withholding correctly - mistakes here can be costly later. If you get stuck on specific foreign partnership questions during preparation, consider using Claimyr to speak directly with an IRS agent. At $60-70 total for software plus maybe $40-50 for Claimyr if needed, you're still well under what most accountants would charge while getting professional guidance where you need it most.

Has anyone actually looked at OP's investment options with Paylocity? Are they mainly target date funds or do they have some decent index fund options? The fees make a huge difference over time.

Great decision Tyler! You've got a solid plan there. Just wanted to add a few practical tips for when you start doing those transfers: 1. Keep track of your transfer dates - most HSA providers limit you to 1-2 free transfers per year, so you'll want to batch them up rather than doing frequent small transfers. 2. Consider doing your first transfer once you hit around $2,000-3,000 in your Paylocity account. This way you're past their minimum balance requirement and have a decent amount to make the transfer worthwhile. 3. When you do transfer, leave a small buffer in your Paylocity account (maybe $100-200) to cover any potential fees or timing issues with future payroll contributions. 4. Make sure to update your investment allocations in both accounts so new money gets invested automatically rather than sitting in cash. The fee difference you mentioned (0.35% vs Fidelity's zero-fee funds) will really add up over time. On a $10,000 balance, that's $35/year you're saving, and as your HSA grows to $50,000+ over the years, you'll be saving hundreds annually. Smart move!

Wait, isn't there a rule about tracing where the loan proceeds went? I thought I read somewhere that if you can trace the loan to a home purchase, the interest might be deductible regardless of what secured the loan.

Based on what everyone has shared here, it sounds like your SBLOC interest won't be deductible as mortgage interest since the loan is secured by your securities rather than your home. This seems to be the consistent answer from multiple sources - IRS agents, tax professionals, and analysis tools. However, I'd suggest looking into refinancing options down the road. If you can roll that $65k SBLOC balance into a mortgage refinance when rates are favorable, you could convert it to deductible mortgage interest. Given that you're paying 7.4% on the SBLOC, a refi might make sense from both a rate and tax perspective depending on where mortgage rates are when you're ready. Also worth noting - even if the interest becomes deductible through a refi, you'd need to itemize deductions for it to benefit you. With the current high standard deduction, make sure the total of your mortgage interest, property taxes, and other itemizable expenses would exceed the standard deduction amount. Keep good records of how you used the SBLOC funds in case you do decide to refinance and convert it to mortgage debt later!