Just want to point out that the IRS can refile the Notice of Federal Tax Lien during the 10-year period, which extends the time the lien affects your aunt's credit report and encumbers the property. Also, if the IRS files suit before the CSED expires, they can get a judgment that lasts WAY longer than 10 years. My suggestion would be to at least explore an installment agreement that your aunt can afford. Even small payments show good faith and might prevent the IRS from taking more aggressive collection actions while you figure out a long-term strategy. Just be aware that some installment agreements require you to extend the CSED.

Your aunt's situation is definitely complex, and the "wait it out" strategy has both merits and serious risks that need careful consideration. While the 10-year Collection Statute Expiration Date (CSED) is real, there are several factors that could make this approach backfire. First, let me echo what others have said about tolling events - these can significantly extend the 10-year period. Since your aunt is still on the mortgage for multiple properties, the IRS has substantial leverage and may be more aggressive in their collection efforts before the CSED expires. Given that she's in her late 60s and stressed about losing her home, I'd strongly recommend getting a second opinion from a tax professional who specializes in collections. The fact that she's primarily living on 401k distributions might actually work in her favor for certain relief programs or settlement options. A few specific considerations for your aunt: - Her age and income source might make her a good candidate for Currently Not Collectible status or a partial payment installment agreement - If she can prove financial hardship, an Offer in Compromise might settle the debt for much less than $230k - The stress and uncertainty of waiting 6+ more years (assuming 2017 assessments) might not be worth it compared to resolving it now I'd suggest getting the exact CSED dates from the IRS directly and having a collections specialist review all her options before committing to the waiting strategy. Sometimes proactive resolution, even if it costs something upfront, provides better long-term financial and emotional outcomes.

Has anyone actually used the Multiple Jobs Worksheet on the W-4? I tried following it and got completely confused by step 2. Is there a simpler way to handle this?

I'm in a similar situation with multiple jobs and found that the key is understanding that each employer withholds taxes as if that's your only income. This usually results in under-withholding when you add up your total tax liability. Here's what worked for me: I used the IRS Tax Withholding Estimator (it's free on the IRS website) and entered information for both jobs. It calculated that I needed to have an additional $150 per month withheld from my higher-paying job to avoid owing at tax time. The estimator will tell you exactly what to put in each section of your W-4 forms. For most people with two jobs, you'll end up putting an extra dollar amount in Step 4(c) "Extra withholding" on one of your W-4s (usually the higher-paying job). Don't forget to update your withholding if either job's income changes significantly throughout the year. I learned this the hard way when my part-time hours increased and I ended up owing $800 at tax time!

This is a really comprehensive discussion! One additional consideration I haven't seen mentioned is the AMT (Alternative Minimum Tax) implications. If you're subject to AMT, the mortgage interest deduction rules can be slightly different, especially for refinances that exceed the original purchase price. Also, since you mentioned the property needs work, be aware that if you use any of the cash-out funds for capital improvements (not just repairs), you'll want to keep detailed records of those expenses. Capital improvements can be added to your cost basis, which reduces capital gains if you sell later. The IRS distinguishes between repairs (deductible in the year incurred if it's a rental property) and improvements (added to basis), so proper categorization matters. One more tip: consider getting a formal appraisal done right after you complete the initial repairs but before you refinance. This establishes the improved value and can help with both the refinance process and your tax documentation.

One more consideration that hasn't been mentioned is the timing of your mortgage interest payments for tax purposes. Since you're doing this in two phases (cash purchase, then refinance), make sure you understand when your first mortgage payment will be due and how that affects your current tax year deductions. If you close on the refinance late in the year, you might only have a few months of interest payments to deduct for that tax year. Conversely, if you do this early in the year, you'll get the full benefit. This timing can be especially important if you're close to the standard deduction threshold that others mentioned. Also, don't forget to factor in the closing costs for the refinance. Some of these (like points paid) may be deductible immediately or over the life of the loan, depending on your situation. The loan origination fees and points on a refinance are typically amortized over the loan term rather than deducted in year one, unlike points paid on an original purchase mortgage. Keep all your closing statements from both transactions - the IRS may want to see the paper trail showing the connection between your cash purchase and subsequent refinance if they ever question the deduction.

This thread has been incredibly helpful! I'm in a similar situation to you, Luca - just started a new job with a 401k and already have a Roth IRA. Reading through everyone's responses has really clarified the strategy for me. What I found most valuable is the consensus on contribution order: employer match first (free money!), then max the Roth IRA for flexibility, then back to maxing the 401k. The point about having both pre-tax and post-tax retirement savings for tax diversification in retirement is something I hadn't really considered before. One thing I'd add for anyone else reading this - make sure to check if your employer offers any additional benefits like HSA contributions if you have a high-deductible health plan. HSAs have triple tax advantages and can be another great retirement savings vehicle on top of your 401k and IRA. Also, don't forget to actually invest the money once it's in your accounts! I made the mistake of contributing to my IRA for months before realizing the money was just sitting in a settlement fund earning basically nothing. Make sure you're actually purchasing investments, not just making contributions. Thanks to everyone who shared their knowledge here - this is exactly the kind of practical advice that makes a real difference!

You're asking all the right questions, and yes - you can absolutely max out both accounts! The $23k 401k limit and $7k Roth IRA limit are completely separate, so at your $85k income you're well positioned to take advantage of both. I love that you're thinking about this early in your career. Here's what I'd suggest based on your situation: 1. First priority: Contribute enough to get your full employer match (sounds like 6% based on your comment) - this is free money you can't afford to leave on the table 2. Build/maintain an emergency fund if you haven't already - you want 3-6 months of expenses saved before going all-in on retirement contributions 3. Max out your Roth IRA ($7k) - you'll have way more investment options than most 401k plans, plus the flexibility to withdraw contributions if absolutely necessary 4. Then go back and max your 401k if your budget allows The math works out to about $2,500/month total if you max both accounts. That might be aggressive on an $85k salary depending on your other expenses, so don't feel like you have to hit those maximums immediately. Start with what's sustainable and increase over time as your income grows. One practical tip: set up automatic contributions so you never have to think about it. Your 401k can be a percentage of each paycheck, and you can automate the IRA transfer right after payday. Makes it much easier to stay consistent! You're way ahead of most people just by asking these questions. Even if you start smaller and work up to the maximums, the compound growth over time will be incredible.

Real talk - get a CPA for this. I tried doing this myself last year and messed it up. Had to pay penalties and interest. With the depreciation recapture, capital gains, and figuring out improvement vs repair classification - it's complicated and the stakes are high with that much money on the line. I spent maybe $400 on a CPA who specializes in real estate and she saved me over $5k compared to what I would have filed. She knew exactly how to handle the pre-sale improvements and found deductions I didn't even know existed.

I went through this exact same situation when I sold my rental property last year. The key thing to understand is that those pre-sale renovations you described - new kitchen, roof, floors, etc. - are definitely capital improvements that get added to your basis, not deducted as current expenses. Your math looks correct: $237,000 adjusted basis + $47,000 improvements = $284,000 new basis. Sale price of $415,000 minus $284,000 = $131,000 capital gain (plus you'll owe depreciation recapture tax on that $33,000 at 25%). On your tax return, you'll report this on Form 4797 Part I for the sale of rental property, then it flows to Schedule D. The $47,000 doesn't appear as a separate line item - it's just part of your total adjusted basis calculation. Make sure you keep detailed records of all those improvement receipts because the IRS may want to see them if you're audited. One thing that caught me off guard was the depreciation recapture - that $33,000 gets taxed at 25% regardless of your capital gains rate, so budget for that additional tax hit!