I went through something very similar with my old Coca-Cola shares that I inherited and had in DRIP for years. The key thing to remember is that each DRIP purchase creates a separate tax lot with its own cost basis and purchase date, even if it's just buying a fraction of a share. For record-keeping, I'd strongly recommend creating a spreadsheet that tracks each purchase (including reinvested dividends) with the date, number of shares purchased, and price per share. Then apply any stock splits chronologically to adjust both the share count and cost basis per share for each lot. When you sell using FIFO, you're correct that you'd start with your oldest shares first. So yes, your original gifted share (now 4 shares after the splits) would be sold first, then move chronologically through your DRIP purchases. One thing to watch out for: make sure you're accounting for any dividend reinvestments that happened between the stock splits, as those would have their own purchase dates and would also be subject to the split adjustments. It can get complex quickly, but the principle remains the same - oldest shares out first under FIFO.

One thing that might help is to check if McDonald's has an investor relations section on their website with historical dividend and split information. Many companies maintain detailed records of all their corporate actions that you can use to verify your calculations. Also, since you mentioned this was a gift from your grandparents, make sure you're using their original cost basis (what they paid for it), not the fair market value when you received it. Gifted shares retain the original owner's cost basis, unlike inherited shares which get a stepped-up basis. If you're still enrolled in any dividend reinvestment plans, your statements should show the cost basis for each DRIP purchase. Many companies switched to electronic recordkeeping in the early 2000s, so you might be able to access historical records online through the plan administrator's website.

I went through this exact same confusion with my Schwab statements last year! The way I finally understood it: your broker creates the 1099-B showing all your stock sales, and they also organize that same information in Form 8949 format to make your life easier when filing. You're not double-reporting anything - you use the 1099-B data to fill out Form 8949 on your actual tax return. Think of the broker's "Form 8949 section" as a helpful cheat sheet showing you how to organize the 1099-B information. In FreeTaxUSA, just go to the investment income section and enter each transaction from your 1099-B (or use that organized section your broker provided). The software will automatically generate the real Form 8949 and Schedule D for your return. Pro tip: if you're missing sale dates, try downloading your year-end tax statement from your broker's website - it usually has more complete information than the consolidated document they mail you. Most brokers keep detailed transaction records available online for at least 3 years.

As someone who's been dealing with investment taxes for several years now, I can confirm what others have said - you're definitely not double-reporting! The confusion is totally understandable though. Here's the simplest way to think about it: Your broker sends the 1099-B to both you and the IRS showing what happened. Form 8949 is YOUR form that you fill out using that 1099-B information to report it on your personal tax return. Many brokers now format their statements to show both because they know it helps taxpayers. One thing I'd add that hasn't been mentioned - make sure you pay attention to the "Box 1a" codes on your 1099-B. These tell you whether the cost basis was reported to the IRS or not, which affects how you fill out Form 8949. FreeTaxUSA will ask you about this when you're entering the transactions. Also, don't stress too much about getting every tiny detail perfect on your first year. The IRS computer systems will catch most discrepancies and send you a notice if something doesn't match up with what your broker reported. Just be as accurate as you can with the information you have!

Anyone know if the interest deduction limits are different if you bought your house in a high-cost area? I've heard something about exceptions for certain housing markets.

Just wanted to add one more thing that might help - when you're calculating that average balance, make sure you're using the principal balance only, not the total payment amount. Your Form 1098 should show the outstanding principal balance at year-end, but if you're calculating monthly averages, don't include the interest portion of your payments. Also, keep all your mortgage statements and closing documents organized in case the auditor asks for backup documentation. They'll want to see proof that the loan was actually used to purchase your home (not a cash-out refi for other purposes). Since you bought in 2022, your closing disclosure should clearly show this was acquisition debt. The fact that you're being thorough about this now will definitely help your audit go more smoothly!

Has anybody else had issues with the irs e-file system this year? My return keeps getting rejected but doesn't explain why.

This is a really common situation that catches a lot of people off guard! The main culprit is definitely the Earned Income Tax Credit (EITC) like others mentioned. At $27k with 4 dependents, you were probably getting the maximum EITC of around $6,000-7,000, but at $54k you're likely getting little to none of it. Here's what probably happened: Last year your total tax liability was probably very low (maybe $2,000-3,000) but you got huge refundable credits that gave you that $14,750 refund. This year, even though you're paying more in actual taxes, those big credits are mostly gone. The silver lining is that you're definitely better off financially overall - you're keeping way more money throughout the year in your paychecks. That $14k refund was essentially the government giving you your own money back that they over-collected, plus credits for being lower income. For next year, I'd suggest using the IRS withholding calculator and maybe having a bit extra withheld if you want a bigger refund. Also look into maximizing any retirement contributions (401k, IRA) since those can lower your taxable income and potentially help you qualify for more credits.

Don't forget you need to keep track of these payments yourself!! I learned this the hard way. TurboTax doesn't automatically know about that check you wrote to your state last year. You have to manually enter it when you get to the itemized deductions section. Same goes for any estimated state tax payments you made. Keep records of EVERYTHING because it's super easy to forget by the time next tax season rolls around.

This is such a common confusion! I went through the exact same thing last year. The key thing to remember is that you deduct state taxes in the year you actually PAID them, not the tax year they were for. So your $650 payment from last year gets deducted on THIS year's federal return if you itemize. But here's what tripped me up initially - make sure you're not double-counting anything. If you had state taxes withheld from your paychecks last year AND paid additional taxes when you filed, you can deduct both amounts, but they go on different years' returns. Also, don't forget about the $10,000 SALT cap that others mentioned. If you live in a high-tax state and own property, you might hit that limit pretty quickly between state income taxes and property taxes. I ended up barely under the cap, so every dollar of state tax deduction actually helped me. Definitely worth running the numbers both ways (itemized vs standard deduction) to see which gives you the better result!