Thanks for mentioning Ordlock v. Commissioner - I hadn't heard of that case! Did you have to pay the attorney a lot up front? My client is already out the $92k refund so she's struggling with the idea of paying more money for something that might not work.

Our attorney worked on contingency - he took 30% of what we recovered. Most tax attorneys dealing with refund cases will work this way since they know if they win, there will be money to pay them. The Ordlock case is perfect for your situation since it specifically addresses California community property law and the IRS's obligation to consider separate property interests even in community property states. The key in our case was proving that the refund was generated primarily from my wife's separate withholdings. I'd suggest at least doing a consultation with a tax attorney who specializes in Tax Court petitions. Many offer free initial consultations. Just having the attorney letterhead on your communications sometimes gets the IRS to take a second look before it ever gets to actual litigation.

Did you submit this directly to the IRS or did you go through the appeals process first? I'm in a similar situation but in Washington state (also community property).

I submitted it directly to the address on the rejection letter as a "reconsideration request" rather than a formal appeal. In my cover letter, I specifically referenced that I was providing "additional documentation not available during the initial review" which I think helped get it looked at. For Washington state, you'd want to focus on the same principles - documenting the separate nature of your income and withholding. The community property rules are similar but not identical, so make sure you're addressing the specific Washington state provisions. The most helpful document for me was a signed statement from my ex acknowledging the debt was his alone. If you can get something like that, it really strengthens your case.

Sometimes it's for tax efficiency, especially for companies that don't plan to go public. LLCs avoid the "double taxation" issue of C-Corps (where profits are taxed at the corporate level, then taxed again when distributed to shareholders). Some tech companies, particularly those that generate significant profits early and want to distribute them, prefer the LLC structure. It's also common in certain sectors like real estate tech or in companies backed by private equity rather than traditional VC. OP, one thing to check - some tech companies use an "Up-C" structure where there's a C-Corp on top for some equity and an LLC underneath for operations. This gets complicated fast, so definitely worth understanding which entity your equity is actually in.

Omg this sounds like a nightmare. Would a regular accountant even know how to handle this or would you need some kind of specialist? I'm getting offered something similar but now I'm wondering if it's worth the hassle.

You definitely need an accountant who specializes in multi-state taxation and pass-through entities. Regular tax preparers often struggle with this complexity. In my case, I ended up using a CPA who specialized in partnership taxation and charged about $2,500 for my tax return that year. Expensive, but worth it since they identified several state-specific deductions I wouldn't have known about. If your equity grant is significant, the tax complexity is probably worth dealing with. But for smaller grants, you have to weigh the potential upside against the added tax preparation costs and headaches.

I tried the Upwork approach last year and had mixed results. Found a CPA with great reviews, but she got totally overwhelmed during tax season and communication suffered. Also, verify their credentials independently - not everyone claiming to be a CPA on those platforms actually is. Check your state's CPA license lookup tool.

Thank you for sharing your experience. That's a really good point about verification - I hadn't considered that credentials might not be properly vetted on freelance platforms. I'll definitely use my state's CPA license lookup tool if I go this route. The communication issue during busy season is concerning too. Maybe I should look for someone who has a smaller client base or specifically mentions their communication protocols during tax season.

This sounds promising! How did you find them initially? Was it through a referral or did you search online? I'm wondering what search terms would be most effective to find these types of regional firms with virtual services.

Bad idea. I tried that approach with about $8k in stock sales I hadn't reported, and I got a CP2000 notice from the IRS about 8 months later. They automatically added penalties and interest for the "underpayment." It wasn't a full audit, but they definitely caught the discrepancy between my brokerage's reporting and my tax return. Just fix the past returns - it's much less stressful than waiting for them to find it.

Thanks for sharing your experience. That's exactly what I was worried about happening. Did you end up filing amended returns after getting the notice, or did you have to go through some other process to resolve it?

You can absolutely use TurboTax to file amended returns (Form 1040-X). They have a guided process specifically for this. Make sure you have all your 1099-B forms from your brokerage for the years you're amending, as you'll need to complete Form 8949 (Sales and Dispositions of Capital Assets) for each year.

Does the Vanguard calculator work if you have income from both self-employment and a W-2 job? I work part-time for a company and also do freelance work on the side.

The Vanguard calculator works best for purely self-employed individuals. For mixed income situations where you have both W-2 and self-employment income, it gets more complicated. For someone with both types of income, you'll need to calculate your SEP contribution based only on your self-employment income, and keep in mind any employer retirement contributions from your W-2 job count toward your total annual limit. The calculator won't automatically factor in those employer contributions, so you'd need to do some additional calculations manually. In your specific situation, I'd recommend using a more comprehensive calculator or consulting with a tax professional just to be safe.

Thank you all so much for the helpful responses! This was way more complicated than I thought, but now I understand why the 25% is actually 20% in practice. I'll definitely use the formula that Profile 22 shared, and might check out that taxr.ai tool to double-check my calculation since I don't want to mess this up. For my $95k in net profit, looks like I can contribute around $17,550 which is way more than I've been putting away. Time to boost those retirement savings!