I went through something very similar when my grandfather passed last year. The key thing that helped me was requesting a detailed breakdown from the insurance company showing exactly what comprised the total payout. Most companies will provide this if you ask specifically for it. In my case, the $85,000 total included $82,100 in actual death benefits (completely tax-free) and $2,900 in interest that accrued during their processing delay. Only that interest portion required tax reporting. One thing to watch out for - some insurance companies will lump everything together on the initial payout statement, so you really need to ask for the itemized breakdown. Also, if your aunt had any outstanding policy loans against the life insurance, that can sometimes complicate the tax situation, though it doesn't sound like that's your case. Since you mentioned the insurance company gave you the runaround, I'd suggest asking to speak specifically with their "tax documents" or "1099 department" when you call back. They're usually more knowledgeable about these reporting requirements than general customer service.

I'm going through a similar situation right now with my uncle's life insurance policy from last year. After reading through all these responses, I called the insurance company this morning and asked specifically for their "1099 department" like Angelina suggested - what a difference that made! The rep was able to pull up my payout details immediately and confirmed that out of the $65,000 total I received, $2,100 was actually interest that accumulated during their 52-day processing period. She said they should have automatically sent me a 1099-INT for that interest portion, but there was apparently a system glitch that prevented some 2024 forms from being mailed out. They're expediting a corrected 1099-INT to me within 5 business days. I had no idea I was supposed to report that interest - I would have completely missed it on my tax return! Really grateful for everyone sharing their experiences here, especially the tip about asking for the specific department that handles tax documents. For anyone else dealing with this, definitely request that itemized breakdown showing the death benefit separate from any interest. Don't just assume the entire payout is tax-free like I initially did.

Anyone recommend a good tax software that handles rental property sales well? I tried TurboTax last year and it totally messed up my depreciation recapture calculations.

I went through a similar situation last year and learned some hard lessons about capital gains planning. While you can't directly offset the gains from your sold property with improvements to other properties, there are still some strategies worth considering for your current situation. First, make sure you're properly accounting for all the capital improvements you made to the property you just sold - these should increase your basis and reduce your taxable gain. Things like major renovations, roof replacement, HVAC systems, etc. can all be added to your cost basis. For your other properties, those improvements you're planning ($7,800 for flooring, $9,200 for the deck) will still benefit you tax-wise through depreciation over time. Just make sure to keep detailed records and receipts for everything. One thing to consider: if you have other investments showing losses this year, you might be able to harvest some capital losses to offset your rental property gains. Also, depending on your income level, you might qualify for the 0% capital gains rate on a portion of your gain. The tax code around rental properties is complex, so it might be worth consulting with a tax professional who specializes in real estate to make sure you're not missing any legitimate strategies for your specific situation.

One piece of advice - make sure you keep track of all your interest throughout the year, even if it's small amounts. My HYSA started with really competitive rates last year (4.5%) but dropped to 3.75% by year end, and I earned just over $200 in interest. When tax time came, I had forgotten about one of my accounts that only earned like $8 in interest, and didn't receive a 1099-INT for it (since it was under $10). But when I did my taxes, I realized I should have included it anyway. Not that the IRS would come after you for a dollar or two in taxes, but technically you're supposed to report ALL interest.

I'm in a very similar situation! Just wanted to add that if you're doing gig work and getting paid in cash, you might want to consider whether any of that income needs to be reported as self-employment income on Schedule C. Even though it's cash and you might not get 1099s, if you're earning more than $400 from self-employment in a year, you're technically required to report it and pay self-employment taxes. This could actually work in your favor though - if you do need to file for the self-employment income, then reporting your interest income becomes part of the same return rather than a separate concern. Plus, you might be able to deduct some business expenses from your gig work that could offset both the self-employment tax and any tax on your interest. I'd recommend keeping good records of both your gig income and any related expenses (gas, supplies, etc.) alongside tracking your interest earnings. The combination might put you in a different filing situation than just having interest alone.

Data point for you. Filed 2/1. Accepted same day. Refund received 2/23. No special credits. Direct deposit. Married filing jointly. Standard deduction. Just W-2 income. No state refund yet. Checked WMR daily. No status change until suddenly showing approved. Transcript updated two days before WMR. Received text from bank about pending deposit. Amount matched exactly what was expected. No communication from IRS during process.

Thanks for sharing your experience! As someone who's been through this process a few times, I can add that the "accepted" vs "approved" distinction is crucial. When the IRS accepts your return, they're basically saying "we received it and it passed basic validation checks." The real work happens during processing, where they verify everything matches up with third-party documents (W-2s, 1099s, etc.). For married filing jointly returns, processing times can vary depending on whether both spouses' information is easily verifiable. If there are any discrepancies or if either spouse's income information needs additional verification, that can add time. My advice: Set up account access on IRS.gov to check your transcript directly. The codes there will give you much more insight than the Where's My Refund tool. And honestly, try to resist checking daily - it just adds stress and the status rarely changes that frequently. Good luck with your first joint return!

I went through a similar situation last year with I-Bonds and education planning. One thing that wasn't mentioned yet is the timing strategy for bonds approaching final maturity. If any of your I-Bonds are getting close to their 30-year final maturity date, you'll be forced to recognize all the interest income in that tax year regardless of your plans. Also, don't overlook the potential benefits of keeping some I-Bonds as part of your overall financial strategy. Even though you can't roll them tax-free into a 529, I-Bonds still offer inflation protection and tax deferral that you lose once you cash them out. For your daughter's college timeline (she's 12 now, so college in about 6 years), you might want to calculate whether the guaranteed returns and tax deferral of keeping the bonds outweigh the potential growth in a 529 plan, especially given current market conditions. Sometimes the "tax-efficient" move isn't always the most financially beneficial move overall.

One strategy you might want to consider is a phased approach rather than cashing out all your I-Bonds at once. Since you have bonds in multiple names and presumably different purchase dates, you could strategically redeem them over several years to manage the tax impact. For the bonds in your and your husband's names, you could cash out the older ones first (assuming they have lower interest rates) and reinvest in a 529 plan to start getting tax-free growth on future earnings. For your daughter's bonds, as others mentioned, those need to be used for her benefit, but a 529 with her as beneficiary would qualify. Also consider your state's 529 plan benefits - many states offer tax deductions for contributions that could partially offset the federal tax hit from cashing out the I-Bonds. The state tax savings might make the overall strategy more attractive than it appears at first glance. Since you're in a higher income bracket, you might also want to look at whether spreading the bond redemptions across multiple tax years could help avoid pushing you into an even higher tax bracket in any single year. The tax software or professional advice mentioned by others could help you model different scenarios to find the optimal timing.