Has anyone had issues with property taxes being reported incorrectly on these 1098 forms after a loan transfer? My new servicer didn't report any of the property taxes paid through escrow, but the old one did. Trying to figure out if I need to get a corrected form.

This is exactly the situation I found myself in last year! The stress of trying to figure out which numbers to use was keeping me up at night. What really helped me was creating a simple spreadsheet where I listed every mortgage payment I made throughout the year with the dates and amounts, then compared that to what each 1098 form was reporting. I discovered that my original lender was including some fees in their interest calculation that weren't actually deductible interest, while my new servicer had the cleaner numbers. The key is to focus on what you actually paid in mortgage interest, not necessarily what the forms say if there are discrepancies. Also, don't stress too much about triggering an audit - mortgage interest reporting issues are super common and the IRS sees this all the time. As long as you're being honest about what you actually paid and can document it, you'll be fine. Keep copies of all your payment records and mortgage statements just in case you need them later!

PSA: Be aware that the IRS is really ramping up enforcement on crypto. They added that question to the front page of Form 1040 asking if you've transacted in digital assets for a reason. With $325k, you're definitely on the radar. Better to go overboard with documentation than risk an audit where they assume zero cost basis.

Adding to what others have said - I work as a tax preparer and see crypto situations like this regularly now. The key is establishing a "reasonable method" for determining your cost basis when original records aren't available. Your transaction hash is gold - it proves exactly when the crypto entered your wallet. From there, you can use any reputable source for historical pricing (CoinMarketCap, CoinGecko, etc.) to establish what the fair market value was on that acquisition date. The IRS Publication 551 actually addresses situations where original purchase records are unavailable. Document everything: save screenshots of the historical price data you used, note which website/source you referenced, keep the transaction hash info, and write a brief explanation of your methodology. If you have any bank statements showing transfers to the exchange around that time, include those too. For a $250k gain, I'd strongly recommend having a crypto-experienced CPA review everything before filing. The peace of mind is worth the cost, and they can help ensure you're not missing any deduction opportunities or making any reporting errors that could trigger unwanted attention. One more thing - start thinking about quarterly estimated payments now if you haven't already. A gain this size could put you in underpayment penalty territory if you wait until next April to pay.

One thing nobody mentioned yet - make sure you're not double counting any interest payments! Sometimes when loans transfer, both companies might report interest for the same month. Double check the periods covered by each 1098 to make sure there's no overlap. Also, remember that if you paid points when you refinanced with Company A, those might be reported separately on the 1098 and are generally deductible over the life of the loan (not all at once in the year you refinanced).

This is such a helpful thread! I'm dealing with a similar situation but with an added complication - my mortgage was sold twice in 2024, so I have 4 different 1098s from 3 different lenders. Based on what everyone has shared, it sounds like I should treat each 1098 period separately for the average balance calculation, then add up all the interest amounts for the total deduction. The key insight about not combining the balances since it's the same underlying debt is really reassuring. One question for anyone who's been through this - did you run into any issues with your tax software flagging the multiple 1098 entries as unusual? I'm worried TurboTax might think something's wrong when I enter 4 separate mortgage interest forms for what's essentially the same property.

I've tried both and honestly went back to TurboTax. FreeTaxUSA is cheaper for sure, but I missed a pretty big education credit when I used it because the questions weren't as clear to me. Ended up filing an amended return. If your taxes are super simple, FreeTaxUSA is fine, but if you have anything slightly complicated I'd stick with TurboTax.

I made the switch from TurboTax to FreeTaxUSA last year and it's been great! For your situation (W-2, mortgage interest, investments), FreeTaxUSA will definitely handle everything you need. The interface is more straightforward - less flashy graphics but very functional. One thing I really appreciated was no constant upselling like TurboTax does. With TurboTax I always felt like they were trying to get me to upgrade to a more expensive version I didn't need. FreeTaxUSA just asks the questions, handles your taxes, and that's it. The savings are real too - I went from paying around $80 with TurboTax to $15 for state filing only (federal is free). Same accuracy, way less cost. The only thing you'll miss is some of the hand-holding, but honestly the step-by-step process is still very clear.

2 This might be a dumb question but do I need to make quarterly estimated payments on self-employment tax too or just on income tax?

Just to add another perspective - I've been self-employed for about 5 years now and this confusion about SE tax vs income tax trips up almost everyone in their first year. One thing that really helped me was setting up a separate savings account specifically for taxes and automatically transferring about 30% of every payment I receive. This covers both the self-employment tax (around 14% after the deduction for the employer portion) plus income tax. It's better to overestimate and get a refund than to be short come tax time. Also, don't forget that you can deduct half of your self-employment tax when calculating your income tax - it's like getting back the "employer portion" since you're paying both sides as a self-employed person. The tax software handles this automatically but it's good to understand why your taxable income gets reduced.