Do you know if there's any way to offset or reduce state capital gains taxes? Do strategies like 401k contributions work for state taxes too?

Generally, 401k contributions will reduce your state taxable income as well as federal, so that strategy works for both. In most states, their tax system is linked to the federal system, so deductions that work federally often work at the state level too. Some states have unique quirks though. A few states offer special capital gains exclusions for in-state investments or specific industries. And nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) don't have income tax at all, so capital gains are only taxed federally if you live there.

Tax-loss harvesting can be a great strategy. Basically, you can use investment losses to offset your capital gains dollar-for-dollar. If your losses exceed your gains, you can even use up to $3,000 of those losses to offset ordinary income, with any remaining losses carrying forward to future years. Just be careful about the wash-sale rule - if you sell an investment at a loss and buy the same or a "substantially identical" investment within 30 days before or after the sale, you can't claim the loss for tax purposes.

This sounds great! Would your spreadsheet work for a restaurant business with about 45 employees? And does it account for the different ERTC rates between 2020 (50% of qualified wages) and 2021 (70% of qualified wages)?

It should definitely work for a restaurant with 45 employees. You'll just need to add more rows for the additional staff, but all the formulas will adjust automatically. And yes, it has separate sections for 2020 and 2021 with the different credit percentages (50% vs 70%) and different qualified wage caps ($10,000 per year in 2020 vs $10,000 per quarter in 2021). I actually designed it when helping a friend with his restaurant, so it already has some restaurant-specific features like allocating tipped employees appropriately. Just make sure you customize the state unemployment rate section since that impacts some calculations.

We just got our ERTC refund last month after waiting 14 months. Filed in March 2022 and check arrived April 2023. About $168k total. No explanation for the delay and no interest payment included even though they're supposed to pay interest after 45 days. Just be patient, it'll come eventually.

This is great advice! Finding the specific line where the difference occurs is key. Then you can google that specific tax form line to check which calculation is correct.

Is that really correct though? Won't that cause issues when you sell the shares later? I thought there was a specific way you had to report ESPPs to make sure the basis gets tracked correctly.

You're right that it's not ideal. The proper way is definitely through the Stock Options section I mentioned. The "Other Income" approach is really just a last resort if you absolutely cannot find the proper entry point. When you later sell the shares, you'll need to manually calculate and enter the correct adjusted basis. It's much better to use the proper ESPP entry screens which will help track your basis automatically and ensure everything is reported correctly on your tax forms.

You're definitely not alone. I switched from FreeTaxUSA to TaxSlayer last year because of this exact issue. The problem is that most tax software is designed for "typical" W-2 employees without stock compensation. As soon as you have slightly more complex situations, it becomes a treasure hunt.

Do you know if you need to file the state R&D credits at the same time as the federal ones? Or can you do federal first and then state later after you've seen if the federal ones are accepted?

You generally can file them separately with different timelines. Most states don't require that you've been approved for the federal credit before claiming the state credit, though some states do require you to at least have claimed the federal credit. The advantage of filing them together is that your documentation will be fresh and consistent. If you wait too long between filings, you might find discrepancies in your documentation which could raise red flags in an audit. But there's no technical requirement to file simultaneously in most states.

I've successfully claimed R&D credits for software development for 3 years now. The key is documenting the technical uncertainty you faced. Keep all technical specifications, design documents, meeting notes discussing technical challenges, repository commit messages, and testing documentation. The IRS wants to see that you were developing something truly innovative - not just implementing known techniques. Track time specifically spent on experimental development vs. routine coding. For your fintech integration, focus on documenting the technical uncertainties you faced when developing the integration and how you systematically evaluated alternatives.