Thanks for mentioning this! My second job actually just increased my hours, so I'll probably be making about 25% more there than when I first did the W4 calculation. Should I just redo the entire IRS calculator or is there a simple adjustment I can make?

Definitely redo the entire calculator with your updated income projections. There's no simple adjustment because the calculator is considering tax brackets, your whole annual income, and how much has already been withheld year-to-date. With a 25% increase at your second job, that could potentially push some of your income into a higher tax bracket, so you want the calculator to recompute everything. While you're at it, make sure both jobs have the correct W4 settings. For the highest-paying job, use the results from the calculator. For the second job, you might want to check the box in Step 2(c) or use the multiple jobs worksheet to ensure enough is being withheld there too.

This happened to me too! That $701 sounds about right for adjusting withholding after marriage mid-year. Just don't forget to submit a new W4 in January like others said.

Couldn't this be considered some kind of tax avoidance scheme? I thought the IRS had rules against transferring assets just to create tax advantages?

Transfers between spouses are explicitly allowed under IRC Section 1041, which states that "no gain or loss shall be recognized on a transfer of property from an individual to a spouse." This isn't considered tax avoidance but a legitimate planning strategy. The key distinction is that my spouse is genuinely a different taxpayer with a separate SSN. Once the assets are transferred, they legitimately belong to my spouse, who then has the right to select their preferred cost basis method for those newly acquired shares. This differs from trying to change the method on your own shares after you've already made an election.

Those robo-advisors typically use specific identification method from the start, so they avoid the average cost basis problem entirely. But they won't help with existing mutual fund positions that are already using average cost basis. You'd have to sell everything (potentially creating a taxable event) and then move to their platform.

Thanks, that makes sense. I guess there's no easy solution once you're stuck with average cost basis. I'll make sure to use specific identification for any new investments going forward.

5 Do you know if there are any exemptions for inherited property at the state level? I'm dealing with a similar situation but in Washington state, and I've heard rumors about special provisions for family transfers.

17 State exemptions vary widely. Washington has an estate tax with exemptions for certain family transfers, but it's separate from capital gains considerations. Some states offer partial exemptions for inherited family farms or primary residences. The best approach is to check directly with your state's revenue department. Each state has different thresholds, rates, and exemptions. These rules change frequently too, so make sure you're looking at current information for the tax year when you'll sell.

12 My family did this with my grandma's farm property. We sold it in three separate transactions over three tax years. It helped keep us in lower capital gains brackets each year rather than one massive hit. You need to be careful though - there are rules about "related party transactions" and "installment sales" that might apply. We had to structure each sale as truly separate (different parcels to different buyers) to avoid IRS scrutiny.

That's a really good point! Should I also get a copy of his tax return showing he included the income? Or is that too much to ask?

Getting a copy of his tax return would be ideal, but many people aren't comfortable sharing their full tax returns. At minimum, I'd ask for a signed statement that acknowledges the specific dollar amount from the 1099-K and confirms he included it on his Schedule C or business return. If he's willing to provide a redacted copy of his Schedule C showing the income line that includes these sales, that would be even better. The more documentation you have showing this was handled properly and wasn't an attempt to evade taxes, the better positioned you'll be if there are ever questions.

Did the IRS ever contact you about the mismatch between the 1099-K with your SSN and your tax return before you filed the nominee forms?

Wait, I thought the federal health insurance penalty (individual mandate) was eliminated starting in 2019? Isn't it only certain states like CA, MA, NJ, etc. that still have penalties now?

You're absolutely right, and I should have been more clear. The federal penalty was indeed reduced to $0 starting in 2019 through the Tax Cuts and Jobs Act. What I should have specified is that certain states still maintain their own health insurance mandates with penalties, including California, Massachusetts, New Jersey, Rhode Island, and DC. If OP lives in one of these states, the income threshold exemption would still apply at the state level. If they're in a state without a mandate, then there would be no penalty at all regardless of insurance status.

This is a good point. I moved from Massachusetts to New Hampshire last year and got so confused because MA has a penalty but NH doesn't. Make sure TurboTax knows your correct state!