Just to add some clarity on the estimated tax question - the IRS has a "safe harbor" rule that might help you avoid penalties even if you don't make quarterly payments. If you paid at least 100% of last year's tax liability through withholding and other payments (or 110% if your prior year AGI was over $150,000), you generally won't owe penalties even if you have a large tax bill from the inheritance. That said, if the capital gain from the estate sale is substantial, you might still want to make an estimated payment to avoid a big tax bill in April. The IRS charges interest on unpaid taxes even if you qualify for the safe harbor penalty protection. One thing I learned from my own situation - keep detailed records of the date of death value versus sale price. The trustee should provide this information, but having your own documentation (like the death certificate date and any appraisals) can be helpful if there are questions later.

One important thing to keep in mind is timing - since you received the money from the house sale recently, you'll want to act quickly if you think you might owe estimated taxes. The next quarterly estimated tax payment deadline is usually January 15th for the fourth quarter of the previous year. If there was a significant gain between your uncle's death and the sale (meaning the house sold for much more than its value when he died), you might want to calculate roughly what your share of that gain would be and consider making an estimated payment to avoid potential underpayment penalties. Also, don't stress too much about getting the exact death date value from Zillow - it's just an estimate. The trustee should have documentation of the property's fair market value at the date of death, either from an appraisal or other valuation method. This will be the official "stepped-up basis" used for tax calculations. If you're unsure about the numbers, it might be worth consulting with a tax professional who can help you determine if estimated payments are necessary based on your overall tax situation for the year.

Has anyone used TurboTax for calculating QBI? It seems to be confusing me more than helping. The software keeps asking me about W-2 wages paid when I've already indicated I have no employees. Is there a better tax software for sole proprietors claiming QBI?

Great question about QBI! As someone who's been through this with my consulting business, here are a few key points that helped me: 1. At your income level ($85k), you're definitely below the phase-out threshold, so you get the full 20% deduction without any wage limitations. 2. For documentation, keep your Schedule C records clean and organized - that's really all you need at your income level. The W-2 wage stuff your accountant mentioned only matters for much higher earners. 3. One thing that caught me off guard: make sure you're not double-counting any expenses between your regular business deductions and anything that might affect QBI calculation. The Form 8995 (the simple version) is what you'll likely use, not the more complex 8995-A. If you're using tax software, it should handle this automatically once you enter your Schedule C information correctly. Don't overthink it - at your income level, it's pretty straightforward. Just focus on maximizing legitimate business deductions on Schedule C, and the QBI will flow naturally from there.

Called the IRS yesterday about my still processing status. They said I need to verify identity. Don't wait like I did - call if ur stuck on still processing for more than 3 weeks!

This is super helpful! I've been dealing with the same confusion. My status changed from "processing" to "still processing" about 2 weeks ago and I wasn't sure if that was bad news. Based on what everyone's saying here, sounds like I should probably call the IRS soon to see if they need anything from me. Thanks for asking this question - really needed this clarification!

Has anyone used TurboTax for calculating QBI? I tried using it last year and it seemed to miss some deductions. Wondering if H&R Block or TaxAct handle it better for self-employed people?

One thing to keep in mind with your woodworking business - make sure you're tracking ALL your eligible expenses. Beyond the obvious materials and tools, you can also deduct things like: - Portion of your home utilities if you're using garage space exclusively for business - Vehicle expenses for trips to buy materials or deliver furniture - Business insurance premiums - Professional development (woodworking classes, trade shows) - Marketing costs (website, business cards, photography of your work) The more legitimate business expenses you can document, the higher your net profit calculation will be for the QBI deduction. Just make sure you're keeping detailed records and receipts for everything. The IRS loves to see good documentation, especially for home-based businesses. Also, since you're making decent money from this side hustle, you might want to consider making quarterly estimated tax payments to avoid underpayment penalties. The QBI deduction helps, but you'll still owe self-employment tax on that $13,600 profit.

Does anyone know if capital loss carryovers from previous years are also split between short-term and long-term for tax calculation purposes? I've got about $12k in carryover losses from last year's crypto crash.

The confusion about where the different tax rates get applied is totally understandable! I went through the same thing when I first started dealing with capital gains. What really helped me was understanding that Form 1040 is essentially just the "summary" document - it shows your total income from all sources, including the combined capital gains from Schedule D. But the actual tax calculation happens in the background using those worksheets that others mentioned. Think of it this way: Schedule D does all the heavy lifting of separating your short-term vs long-term gains and calculating the net amounts. Then, when it comes time to actually compute your tax liability, the IRS tax calculation process (whether done by software or manually using the worksheets) knows to apply ordinary income rates to any short-term gains and the preferential rates (0%, 15%, or 20% depending on your income level) to long-term gains. If you're doing your taxes manually, you'd use the "Qualified Dividends and Capital Gain Tax Worksheet" in the Form 1040 instructions if you have net long-term capital gains. But if you're using tax software, it handles all of this automatically behind the scenes - you just need to make sure you're entering your transactions with the correct dates so it can properly classify them as short-term or long-term.