Can you actually switch from MFJ to MFS after you've already filed? I'm in the same boat and wondering if I should amend.

Yes, you can switch from married filing jointly to married filing separately by filing an amended return (Form 1040-X), but only until the filing deadline for that tax year. After the deadline passes, you can't switch from joint to separate. However, my accountant actually advised against switching in our case. While it looked like we'd get refunds filing separately based on a simple calculation, we would have lost several valuable credits and deductions that are only available to joint filers. The separate filing calculation also has some special limitations that aren't obvious when you just run a basic comparison. Make sure you're looking at the complete picture before making that decision.

Is this still true with the new tax law? I thought they changed some of this stuff.

That's actually a really good point and might be exactly how I got into this mess in the first place. I didn't realize my employer's HSA match counted toward my annual limit! Is there any easy way to track this throughout the year so I don't go over again?

The easiest way to track it is to regularly check your HSA statements or online account. Most HSA providers show a running total of all contributions for the year, broken down by source (your contributions vs. employer contributions). Some providers also have alert features you can set up to notify you when you're approaching your limit. Otherwise, I'd recommend setting a calendar reminder to check your total contributions quarterly, especially if your employer makes irregular contributions or matches.

This is actually a great question! The IRS doesn't provide a specific formula, but the generally accepted method is to apply the overall account's rate of return to the excess amount. For example, if your HSA grew by 5% during the period the excess was in the account, you'd calculate 5% of your excess contribution amount to determine the earnings attributable to that excess.

Thanks, that's a good point about state requirements. My situation is actually a bit different from last year since I had a big job change plus the crypto stuff, so I'm not sure if last year's return would be helpful as a baseline. What other approaches would you suggest for estimating?

Since your situation changed significantly with both a job change and crypto, you're right that last year's return might not be as helpful. In that case, I'd suggest doing a quick calculation of your W-2 income and estimated tax liability from that (you can find tax tables online), then add an additional amount for crypto. For the crypto portion, even a rough estimate based on your trading volume would help. If you traded $10,000 in crypto with an average gain of 20%, you might set aside roughly 25-30% of those gains ($500-600) for taxes as a starting point. It's not perfect, but it shows good faith effort.

Same happened to my brother! He trades crypto too and just put $0 on his extension form thinking it was just a time extension. He ended up owing about $4k in taxes plus another $800 in penalties and interest. Definitely better to overestimate.

Yikes, that's exactly what I'm trying to avoid! Did you try calling the IRS to get the penalties removed or reduced? I've heard sometimes they'll work with you if it's your first time making this mistake.

Thanks for breaking it down so clearly! I've never filled out a W-9 before. Is there anything tricky about it that I should watch out for?

The W-9 is actually pretty straightforward. The main things to be careful about: Make sure you're using the current version of the form from IRS.gov - it's occasionally updated. Fill in your legal name (as shown on your tax return), not a business name unless you have one registered. For most independent contractors, you'll check the "Individual/sole proprietor" box. The trickiest part is deciding whether to provide your SSN or an EIN (Employer Identification Number). If you're just working as yourself, your SSN is fine. If you've set up a formal business structure, you might have an EIN to use instead.

This is why I use QuickBooks Self-Employed - it explains all this stuff and tells you what forms you need vs what forms others should give you. Helped me avoid so many headaches with clients who dont understand contractor taxes.

That doesn't sound right to me. Form 3115 is typically for changing how you account for things going forward, not fixing past mistakes. For unreported section 1256 contracts from a prior year, a 1040-X amendment should be the correct approach unless there's something unusual about your situation.

Thanks for that clarification. I went back and double-checked with my accountant, and you're right. He had confused my situation with another client who was changing their accounting method for an ongoing business. For my unreported section 1256 contracts, we're just filing a 1040-X amendment as you suggested. The Form 3115 would have been much more complicated and unnecessary for my situation. Really appreciate you pointing that out before I went down the wrong path!

Good news! If you're only trading section 1256 contracts (like SPX options) within an IRA or other tax-advantaged account, you don't need to worry about the mark-to-market rules or the 60/40 split. Those rules only apply to taxable accounts. In an IRA, all the gains and losses are essentially tax-deferred (or tax-free in a Roth), so there's no annual reporting requirement regardless of what investments you hold.