I did this last year! Opportunity Zones give you capital gains deferral if you invest previous capital gains into the fund, potential reduction of those deferred gains, and tax-free appreciation on the OZ investment if held 10+ years. The awesome part is these benefits DO stack with cost segregation and STR advantages. My property is in an OZ in Nashville, and I'm running it as an STR with average stays under 7 days. The cost seg study let me depreciate about 30% of the property value in year one, while still getting all the OZ benefits.

I actually used a different software last year and can't access the account anymore (email changed, password issues, it's a whole mess). Is there any other way to estimate it if I can't get the exact number?

If you absolutely can't get your exact AGI from last year, you can try entering "$0" as your prior year AGI when e-filing. Some tax software allows this as a workaround for first-time filers or people who can't access their previous AGI. Alternatively, you can file a paper return which doesn't require prior year AGI verification. It's slower to process but works if you're in a bind. If you have your W-2s and documentation from last year, you could also recalculate it manually or have a tax preparer help you reconstruct last year's return.

This "$0" trick doesn't always work though. I tried it last year and my return got rejected. Had to file paper in the end which took FOREVER to process. Better to get the actual number if possible.

But doesn't AMT recapture some of the benefit from these charitable deductions? I thought I read somewhere that large charitable donations can still trigger AMT in certain income brackets. Is there an optimal amount to contribute to maximize the benefit?

You're confusing two different concepts. Charitable deductions are treated the same under both regular tax and AMT calculations - they're fully deductible in both systems. What you might be thinking of is that some other deductions (like state taxes) get added back for AMT purposes, which can push you into AMT territory despite having large charitable donations. The optimal strategy depends on your specific situation, but generally, bunching donations in years where you have higher income can be more effective. For instance, if you know you'll have a high-income year due to a bonus or investment sale, that's when maximizing charitable giving through a DAF can provide the greatest benefit by offsetting income that might otherwise be subject to AMT.

This happened to me too! I had no idea about this AMT trap with ISOs until after I exercised. Do you know if there's any way to recover that AMT payment in future years? I've heard something about AMT credits but don't fully understand how they work.

Yes, you can recover that AMT payment through AMT credits! When you pay AMT due to ISO exercises, you generate AMT credits equal to the amount of AMT you paid. These credits can be used in future years when your regular tax exceeds your AMT. The key is that AMT credits can only offset regular tax down to your AMT level - they can't create a refund below that threshold. So if you have years where you don't trigger AMT (maybe due to lower income or fewer preference items), you can use those credits to reduce your regular tax liability. The credits carry forward indefinitely until used, so you don't lose them. Just make sure your tax preparer tracks them properly on Form 8801. Many people miss claiming these credits because they don't realize they have them from prior ISO exercises.

3 Monaco doesn't actually have a tax treaty with the US. This means Monaco residents earning US income are generally subject to the full US tax rates without treaty benefits. Some tennis players deliberately establish residency in countries that do have favorable tax treaties with the US and other nations where they compete. For instance, Switzerland (where Federer lived) does have a US tax treaty that can provide certain benefits, though they'd still pay US taxes on US-sourced income. The tax planning behind where professional athletes choose to live can be incredibly strategic!

Exactly! And what really gets me is how this affects up-and-coming players who might not have the resources for those armies of accountants yet. They're probably getting hit with surprise tax bills they never saw coming. I wonder if there's a threshold where it becomes worth it to hire specialized tax help versus just accepting you're going to overpay. Like, at what point in prize money earnings does it make financial sense to get those expensive international tax specialists? Some of these lower-ranked players might be losing a huge chunk of their already modest winnings just to compliance costs and penalties for getting it wrong.

What tax software do you recommend for this? I've been using TurboTax but never thought about using it for planning rather than just filing.

This is really helpful advice! I'm new to dealing with taxes as a married couple and the "marriage penalty" concept is something I hadn't heard of before. When you mention having the higher earner make the withholding adjustments, did you just add extra withholding in Step 4(c) of the W-4? And how did you figure out the right amount to add? I want to make sure I understand the process correctly before making changes to our forms.

Yes, exactly! I added the extra withholding in Step 4(c) of my W-4 form. To figure out the right amount, I used the IRS Tax Withholding Estimator (you can find it on irs.gov) around mid-year when I had a good sense of our actual income for the year. The estimator takes your year-to-date withholding from both paychecks, estimates your total tax liability, and tells you if you need to adjust. In our case, it recommended I add about $250 per month in additional withholding for the rest of the year to avoid owing money. The nice thing about putting it all on the higher earner's W-4 is that it's easier to track and adjust if needed. Plus, since the higher earner typically has more withholding room before hitting weird payroll system limits, it's usually more straightforward administratively. Just make sure to re-run the estimator if either of your incomes changes significantly during the year - bonuses, raises, job changes, etc. can all throw off your projections!