Thanks for explaining this! I just checked my W-2 from 2021 and sure enough, there is an amount listed in Box 14 that matches when the RSA vested. So if I understand correctly, I should use that as my cost basis when entering this into TurboTax?

Yes, that amount in Box 14 is exactly what you should use as your cost basis. Enter that into TurboTax when it asks for the adjusted basis. This will reduce your capital gain to just the appreciation that occurred between vesting and acquisition. Regarding the 20% rate, once you enter this correct basis, check your total income. If your modified AGI exceeds $200,000 (single) or $250,000 (married filing jointly), you're subject to the additional 3.8% Net Investment Income Tax on top of the 15% long-term capital gains rate, effectively making it 18.8%, which TurboTax might round to 20%.

I agree with this! Same thing happened to me last year and I ended up amending my return after I realized I'd overpaid. The adjustment codes on Form 8949 are crucial for equity compensation.

Does that also work for returned excess Roth IRA contributions? I contributed too much last year and my provider sent me a check, but I'm not sure if it's handled the same way since Roth contributions are post-tax.

For excess Roth IRA contributions that are returned, you generally don't report the principal amount as income (since you already paid tax on it), but you do need to report any earnings on that excess contribution as income in the year you receive the distribution. When you get the distribution, your IRA provider should send you a 1099-R that breaks down how much was principal and how much was earnings. In TurboTax, you'll enter the 1099-R and indicate it was a returned excess contribution, and it should handle the calculations correctly.

I switched to H&R Block online last year after 5 years with TurboTax. Their interface is slightly less polished but I found their help resources more accurate. The big difference was when I called their support line - I got someone who actually knew what they were talking about and gave me a clear answer about how to handle a 1099-MISC for a one-time consulting gig.

Is there any difference in features between the free file versions and the paid ones? I'm worried the free ones might be missing important forms or checks that could save me money.

For basic to moderate tax situations, the free versions have all the essential forms and features you need. The paid versions often add extras like audit support, tax advice hotlines, or more hand-holding for complex situations. The main forms and calculations are identical though - the IRS math is the same regardless of which version you use. Sometimes the paid versions just make certain things more convenient or provide extra peace of mind. But for most people, the free file versions work perfectly fine.

The IRS Free File program typically opens in mid-January. For 2025 (filing 2024 taxes), they've announced it should be available starting January 15th. However, even if you file early, the IRS won't begin processing returns until late January or early February.

Yes, TurboTax will ask if you itemized last year and will calculate the taxable portion of your state refund correctly. It actually imports your previous year's info if you used TurboTax last year too, so it knows automatically. I've been using it for years and it handles this situation well.

Thank you for confirming! That's a relief. I wasn't sure if it would automatically know or if I needed to figure it out myself. I'll just make sure I have last year's return handy when I do my taxes this weekend.

This worksheet is so confusing though!! I tried to use it and got completely lost. Does anyone know if there's a simpler explanation somewhere?

I agree the worksheet is pretty confusing. The basic idea is that you're only taxed on the portion of your refund that actually gave you a tax benefit in the previous year. If your itemized deductions were just barely more than the standard deduction, then only a portion of your state tax deduction actually benefited you, so only part of the refund is taxable. But if your itemized deductions exceeded the standard deduction by more than your state tax payments, then the whole refund would be taxable.

3 Exactly what states require IFTA? I'm mainly running routes between Texas and Oklahoma right now but thinking about expanding.

11 IFTA applies when you operate in multiple states or Canadian provinces. Since you're running between Texas and Oklahoma, you definitely need to comply with IFTA requirements. Both states are IFTA members, as are all 48 contiguous states and most Canadian provinces. You'll need to track your mileage in each jurisdiction and the fuel purchased in each place. The quarterly reports reconcile the fuel taxes - you might get a refund or owe additional tax depending on where you bought fuel versus where you drove. If you're planning to expand your routes, getting a good system to track this now will save you tons of headaches later.

9 This! My accountant charges extra if I mix personal and business expenses. Said sorting through statements takes forever. Any bank recommendations that don't charge crazy fees for business accounts?