As an immigrant myself, I know how confusing US tax system can be! One more thing to know: those 401k statements usually show both contributions and earnings. The earnings (interest/investment gains) aren't taxed now either as long as u keep the money in the account. That's why these accounts r good for retirement saving!

Welcome to the US tax system! As someone who also moved here recently, I totally get the confusion. Just want to add one more thing that might help - when you get your tax software or work with a preparer, make sure they know about your mid-year start date in October. Since you only worked part of the year, your income might be lower and that could affect things like which tax bracket you're in or if you qualify for certain credits. Also, if you're still on a visa (not a green card holder yet), there might be additional forms you need to file depending on your status. The IRS has specific rules for non-resident aliens vs resident aliens for tax purposes. Good luck with your first US tax return!

Another option if you're still stuck is to check with your tax preparer or CPA if you used one during the years around when you purchased the stock. Sometimes they keep copies of old tax returns that might have records of dividend income from that stock, which could help establish when you owned it and potentially give clues about your purchase timing. Also, don't forget to check your old bank statements if you still have access to them online. Many banks keep records going back 7+ years, and you might find the withdrawal or transfer that funded the stock purchase. Even if it doesn't give you the exact cost basis, it could help narrow down the purchase date and amount, which you can then cross-reference with historical prices. The key thing is to document whatever method you use and keep records showing you made a good faith effort. The IRS is generally reasonable about these situations when you can show you tried to find the actual information.

I went through something very similar about two years ago with an old Fidelity account. What ended up working for me was a combination approach that might help you too. First, I contacted Schwab's customer service and specifically asked to speak with someone in their "account reconstruction" department - apparently they have specialists who deal with exactly these kinds of missing cost basis issues from acquisitions. The regular customer service reps couldn't help, but this specialized team had access to more historical TD Ameritrade data than what shows up in your online account. When that didn't get me everything I needed, I used the IRS's own guidance from Publication 551. They actually have a section that covers "Unknown or Indeterminable Cost" and provides a framework for making reasonable estimates. The key is being able to show you made a good faith effort to find the actual information. I ended up creating a simple spreadsheet documenting: 1) All the places I looked for records, 2) The approximate timeframe I remembered buying (even if it was just "sometime in 2011-2012"), 3) Historical price data from that period, and 4) My reasoning for the estimate I used. I attached this as a statement with my tax return. The IRS never questioned it, and my CPA said this approach shows due diligence while being conservative about not understating the tax owed. Much better than using zero and overpaying significantly.

Has anyone here actually gotten audited specifically about S Corp health insurance treatment? I'm curious what the real-world risk is. I've been just paying health insurance personally and taking the self-employed health insurance deduction without running it through my S Corp payroll at all... which I'm now realizing might be incorrect after reading this thread.

Thanks for sharing your audit experience - that's exactly the kind of real-world insight that's helpful! It sounds like the IRS is definitely paying attention to this area. For anyone in a similar situation to @Sasha Ivanov, you'll want to correct this for future years. The proper flow should be: S Corp pays or reimburses health insurance premiums → those amounts get added to your W-2 as wages (but not subject to FICA/FUTA) → you then take the self-employed health insurance deduction on your personal return. Just paying personally and taking the deduction skips the crucial W-2 reporting step that the IRS expects to see. It's one of those things that might fly under the radar for a while, but if you do get audited, it's an easy thing for them to catch since the deduction on your personal return won't match up with any corresponding W-2 wages. The good news is this is usually fixable by amending prior year returns if needed, though you'll want to consult with a tax professional about the best approach for your specific situation.

This is a great question! With your wife's Etsy business generating $135k annually, it definitely makes sense to optimize for tax deductions. A few key points to consider beyond what others have mentioned: Since this will be exclusively for business use, make sure you clearly separate the business portion from any personal use areas. The IRS is very strict about the "exclusive use" test for home office deductions. For the renovation costs, you'll want to break down the expenses into categories: - Structural improvements (framing, drywall) = depreciated over 39 years - Equipment and fixtures that can be removed (certain lighting, shelving) = potentially Section 179 deductible - Electrical work specifically for business equipment = may qualify for faster depreciation One strategy to consider: if you're planning to expand the business further, you might want to size the space slightly larger than current needs. The business use percentage is based on square footage, so maximizing the dedicated business area (while keeping it reasonable) can increase your deductible percentage. Also, don't forget about the ongoing expenses once it's complete - utilities, insurance, maintenance, etc. can all be deducted based on the business use percentage of your home.

With $135k in annual income from the Etsy business, you're definitely in a position where maximizing legitimate deductions makes financial sense! A few additional considerations for your basement renovation project: **Timing Strategy**: Consider the timing of your renovation expenses. If you're expecting the business to continue growing, you might want to spread major expenses across tax years to optimize your overall tax situation. **Business Entity Consideration**: At $135k in income, it might be worth exploring whether your wife should consider forming an LLC or S-Corp for tax advantages. This could affect how home office deductions are handled. **State Tax Implications**: Don't forget to check your state's rules on home office deductions - some states don't conform to federal home office deduction rules, which could impact your overall tax strategy. **Record Keeping System**: Set up a dedicated business bank account and credit card for all renovation expenses if you haven't already. This makes tracking and documenting business expenses much cleaner for tax purposes. The basement renovation sounds like a smart investment for a growing business - just make sure you're maximizing all the legitimate tax benefits available to you!

I went through something very similar last year with a $12,000 escrow holdback on my home sale. Here's what I learned from working with my CPA: You definitely want to treat this as an installment sale using Form 6252. The key is that you'll receive two separate 1099-S forms - one in 2024 for the main sale proceeds and another in 2025 when the escrow is released. If you report everything in 2024, you'll have a mismatch when that second 1099-S shows up. For your situation with $540k sale price and $14,500 holdback, you'd report about 97.3% of both your proceeds AND cost basis in 2024, then the remaining 2.7% in 2025. The $250k capital gains exclusion can be applied proportionally across both years. One thing to watch out for - make sure you keep detailed records of the actual repair costs. If they come in under the $14,500 escrow amount, the difference gets added back to your 2025 proceeds. If they exceed the escrow and you have to pay extra (and it was required by the sale agreement), that reduces your 2025 reportable amount. The Form 6252 calculations might look complicated at first, but it's much cleaner than trying to explain discrepancies to the IRS later. Better to do it right the first time!

Based on my experience handling escrow holdbacks, I'd strongly recommend using the installment sale approach with Form 6252 rather than trying to report everything in 2024. The tax code is pretty clear that when you receive sale proceeds in different tax years, you should report them proportionally. Here's a practical tip that saved me headaches: contact your title company or escrow agent NOW to confirm they understand the 1099-S reporting requirements for your situation. Ask them specifically whether they'll issue one 1099-S in 2024 for the full sale amount, or separate forms for each tax year. Getting this clarified upfront will help you plan your tax reporting strategy correctly. Also, start a dedicated file for all escrow-related documentation - the original sale agreement showing the holdback terms, repair estimates, actual repair invoices when completed, and any correspondence about the escrow release. If the IRS ever questions the timing or amounts, having everything organized will make your life much easier. The proportional allocation math isn't too complex once you get the hang of it, but don't hesitate to work with a tax professional if you're not comfortable with Form 6252. Getting it right the first time is worth the investment, especially with the capital gains amounts you're dealing with.