Just wanted to add some perspective as someone who's dealt with this exact situation. The key thing to remember is that even though it feels unfair (especially when you've put so much money into maintenance), the IRS treats personal vehicles differently than investment assets for good reason - otherwise everyone would try to claim every oil change and car wash as a tax deduction! One thing that might help: keep really good records of any actual improvements (like the backup camera and stereo mentioned above) versus regular maintenance. The distinction can make a real difference in your tax liability. Also, as someone pointed out, the actual tax on $950 probably won't break the bank - long-term capital gains rates are much more favorable than regular income tax rates. If you're still unsure about what qualifies as an improvement versus maintenance for your specific situation, it might be worth the peace of mind to get professional advice or use one of those tax tools people mentioned to make sure you're doing it right.

This thread has been incredibly helpful! As someone who's been putting off dealing with a similar car sale from last year, reading through all these responses finally gave me the clarity I needed. The distinction between improvements vs. maintenance is something I never would have thought about on my own. I actually installed a new exhaust system and upgraded the suspension on my car before selling it - sounds like those might qualify as improvements that could reduce my taxable gain. What really stands out to me is how the actual tax burden might not be as scary as it initially seems, especially with the favorable long-term capital gains rates. Sometimes we get so caught up in the principle of owing taxes that we don't step back and look at the real numbers. I'm definitely going to start keeping much better records for any future vehicle transactions. It's clear that having proper documentation for improvements can make a real difference, and honestly, it's just good practice for any major purchase or sale. Thanks to everyone who shared their experiences and knowledge - this is exactly the kind of real-world advice that's hard to find in generic tax guides!

Did you claim EIC or child tax credit? Those usually trigger more reviews

I had the exact same thing happen to me last month! 570 code with no notices or letters. I was panicking thinking something was wrong, but it turned out to be just a routine review. Mine cleared after about 3 weeks and I got my refund shortly after. The key is to just be patient - I know it's frustrating when you're waiting for your money, but in most cases the 570 resolves on its own. Keep checking your transcript weekly rather than daily to avoid driving yourself crazy!

Something to consider - if your daughter is primarily saving for college, having those FICA taxes withheld might actually be better in the long run. My daughter had a similar situation and we learned that having documented Social Security contributions, even small ones during high school, can help establish her work history for future Social Security benefits.

Just wanted to add another perspective on this - I'm a CPA and see this confusion a lot during tax season. The key thing most people miss is that the FICA exemption for minors is primarily about WHO they work for, not how old they are. Your daughter's situation is actually pretty common - having one employer that's a regular business (pool/city) correctly withhold FICA, and another that's a family business correctly NOT withhold FICA. Both employers were following the rules properly. One tip for parents: when your teen starts working, ask about the business structure. If it's a regular employer (corporation, partnership with non-parent partners, government entity), expect FICA withholding. If it's truly a parent-owned sole proprietorship and the child is under 18, then no FICA should be withheld. The $270 your daughter paid in FICA taxes will count toward her future Social Security benefits, so it's not completely "lost" money - it's an investment in her retirement that started early!

I'm sorry for your loss, Brian. Navigating inherited IRAs is complicated even under normal circumstances, let alone while you're grieving. One thing I want to emphasize that others have touched on is the importance of understanding your current tax situation before making any distribution decisions. With your $110k income, you're likely in the 22% federal tax bracket, so any IRA distributions would be taxed at that rate (or higher if they push you into the next bracket). Here's a practical approach to consider: Calculate what your taxable income looks like in different scenarios. For instance, if you took $6,700 per year (1/10th of the inheritance) for 10 years, how would that affect your overall tax liability versus taking larger amounts in years when you might have lower income? Also, since you're in California, you'll want to factor in the 9.3% state income tax rate on those distributions as well. So you're potentially looking at around 31% total tax on any withdrawals (22% federal + 9.3% state), which makes timing even more important. One strategy some people use is to take smaller distributions in high-income years and larger ones if they ever have a year with reduced income - like if you change jobs, take unpaid leave, or have other life changes that temporarily lower your earnings. The 10-year flexibility really is your friend here. Don't feel pressured to make any immediate decisions while you're still processing everything else.

I'm really sorry for your loss, Brian. Losing a parent is incredibly difficult, and having to navigate complex financial matters on top of grieving makes it even more challenging. Everyone here has given you excellent advice about the tax implications and strategic planning. I wanted to add one more practical consideration that might help: since you mentioned you weren't financially prepared for this situation, make sure you're setting aside money for the taxes as you take distributions. With the combined federal and California tax rates Paolo mentioned (~31%), if you decide to take a $10,000 distribution, you'll want to set aside roughly $3,100 for taxes. This can catch people off guard if they're not planning for it upfront. Also, consider whether you want to have taxes withheld automatically from the IRA distributions or if you prefer to pay estimated quarterly taxes. Some people find it easier to have the custodian withhold 25-30% for taxes right when they take the distribution, so they're not tempted to spend that portion and then scramble to pay taxes later. The flexibility everyone mentioned really is key here. Take your time to process everything and don't feel rushed into making any immediate decisions. The 10-year window gives you plenty of time to plan strategically once you're ready to focus on the financial aspects. Take care of yourself first - the tax planning can wait until you're in a better headspace to tackle it.

Aaron, based on all the discussion here, it really sounds like MFS is your best bet given your PSLF timeline. Just wanted to add one more consideration - make sure you document everything when you switch filing statuses! Keep copies of your tax returns, any correspondence with your loan servicer, and track your qualifying payment counts carefully. I'd also suggest reaching out to your loan servicer BEFORE you file to let them know you're changing from single to MFS. This way they can update your payment calculation as soon as your new tax info is available, rather than you having to chase them down later like some folks mentioned. With only 12-15 months left until forgiveness, you're in the home stretch! The temporary payment reduction from filing separately will definitely be worth more than the tax benefits you're giving up. Just make sure both you and your wife understand which deductions each of you can claim so there are no surprises come tax time.

Aaron, based on all the great advice here, filing MFS with your wife claiming the house definitely seems like the right move for your situation. The $960 difference ($1,389 vs $425) is significant, especially with PSLF so close. One thing I'd add - make sure you submit your updated tax info to your loan servicer ASAP after filing. They often take 2-3 months to process the change, and you want to maximize those lower payments before forgiveness kicks in. Also, keep detailed records of everything since servicers can be... challenging to work with. Since you're in Pennsylvania, the state tax impact should be minimal given their flat rate structure, but definitely double-check those numbers too. You're in a great position with PSLF almost done - this filing strategy should help you squeeze out every bit of savings in these final months!