Thanks for sharing your experience! How many trades would you say justifies paying for a specialist vs using software? I did around 800 trades last year, mostly stocks and some options, but no futures or forex.

At 800 trades, you're right on the borderline where it could go either way. The key question isn't just trade count but whether you might qualify for trader tax status (TTS). If you're trading frequently with substantial account size, hold positions for short periods, and depend on trading income, a specialist can help you claim TTS which opens up huge deduction possibilities like home office, health insurance, retirement plans, and more. Software works fine for accurately reporting your trades and basic gain/loss, but won't provide strategic advice on entity structure, elections, or maximizing deductions. Consider having a one-time consultation with a specialist to see if you're missing opportunities, then decide if ongoing help makes financial sense based on potential tax savings.

I tried one last year (TradeLog I think it was called). It was decent for organizing trades but still required a lot of manual work for wash sales and proper categorization. Ended up having to amend my return when I realized it wasn't handling my VIX futures correctly. You definitely get what you pay for with these specialized programs.

Thanks for mentioning this! Yes, this is actually the final distribution year for the trust. So I need to check that box. For the K-1s, does the software automatically generate those, or do I need to create them separately? And will the refund go to the trust account (which I'm planning to close) or can I direct it somewhere else?

Most tax software will generate the K-1s automatically based on the information you enter in the 1041. You'll just need to make sure the distribution amounts to each beneficiary are entered correctly. For the refund, since this is the final return, you can have it sent to a different address by completing Form 8822-B to notify the IRS of an address change for the trust. Alternatively, you can request direct deposit to a specific bank account on the 1041 itself. Just make sure not to close the trust bank account until after you've received the refund if you're planning to use that account.

This happened to me too! Our accountant made a typo on the EIN and it was a nightmare. The IRS treated it as if we never filed an extension or made a payment. We ended up having to provide proof of payment and it delayed the whole process by like 4 months.

16 Wait, really? I thought capital gains only applied to investments like stocks and real estate. Cars are considered capital assets too?

3 Yes, cars are indeed considered capital assets for tax purposes. Any tangible property you own is generally a capital asset unless it's specifically excluded in the tax code. Since you owned the car for personal use (not as inventory in a business), when you sell it for more than you paid, that's a capital gain. And you're right that this distinction matters because long-term capital gains (assets held more than one year) are typically taxed at lower rates than ordinary income. Depending on your income bracket, you might pay 0%, 15%, or 20% on those gains instead of your normal income tax rate.

17 This is a really good point. I used my last car for Uber driving part-time and had to deal with depreciation recapture when I sold it. Totally different tax situation than a personal vehicle sale.

10 Exactly! Business use dramatically changes the tax treatment. When you claim depreciation deductions for business use of a vehicle, you're reducing your basis in the asset. Then when you sell it, you may have to "recapture" those deductions by reporting them as ordinary income, not capital gains. It creates this weird hybrid situation where part of your profit might be taxed as ordinary income (the recaptured depreciation) and part might be taxed as capital gains (any additional profit above the original basis minus depreciation). Definitely worth mentioning since many people have side gigs using their personal vehicles these days.

Thanks for this info! I just checked and Australia does have a tax treaty with the US. On my 1042-S form, it shows they withheld 5% - does that sound right for the Australia-US treaty? And would I need to do anything to get money back or is that the correct amount?

That 5% withholding rate sounds correct for Australia-US royalty payments (which is how AdSense income is typically classified). Since they've withheld at the correct treaty rate, you don't need to file anything with the IRS to get money back. Just make sure you claim this US tax paid as a foreign tax credit when you file your Australian taxes so you don't end up paying tax twice on the same income. Your Australian tax software or accountant should have a section where you can enter foreign taxes paid to get credit for them.

This is so true! Mine was incorrectly coded as 50 (corporate distributions) with 30% withholding when it should have been code 12 with 10% under my country's treaty. Took forever to get it fixed, but saved me hundreds.

This is super helpful! I don't think I'll meet the safe harbor since my income went up quite a bit in 2024 compared to 2023. How complicated is the Form 2210 to fill out? And what kind of documentation would I need to provide to show this was an unusual circumstance?

Form 2210 is admittedly one of the more complex IRS forms, but you only need to complete certain parts depending on your situation. For the waiver request, you'll fill out Part I, check box A for "Request a waiver," and attach a statement explaining the circumstances (the timing of your RSU vest vs. the sell-to-cover transaction). You don't necessarily need formal documentation upfront, but keep your RSU statements and any communications with your company about the transaction timing. The key is to clearly explain that this was a one-time timing issue outside your control - the vest occurred in one tax year but the withholding happened in the next tax year. If you're using tax software, it should walk you through the process. The penalty itself is usually fairly modest compared to the tax owed, so some people just pay it rather than going through the waiver process, but it's worth trying if the amount is significant.

Our company actually adjusted our year-end bonuses to help offset the tax impact when this happened. Worth asking your HR department if they're aware of the issue and if they have any programs to help employees caught in this situation. Some companies offer tax advance programs specifically for equity compensation.