Don't forget about state taxes! I sold some collectible comic books last year and was shocked that my state wanted a piece too. Depending on where you live, you might owe state income tax on the gains. Some states also have weird exceptions or special rates for collectibles.

One thing I haven't seen mentioned yet is timing considerations. If you're planning to sell multiple pieces, you might want to spread the sales across different tax years to manage your tax bracket, especially since collectibles are taxed at that higher 28% rate. Also, if any of the pieces have appreciated significantly since you inherited them, consider getting a current appraisal before selling. This can help establish fair market value for insurance purposes during the selling process, and it gives you documentation to support your sale price if the IRS ever questions it. For the $3,800-4,500 piece you mentioned, definitely keep detailed records of comparable sales you find online - screenshot them with dates. This kind of documentation can be really valuable if you need to justify your basis calculation later.

Hey Ben! I totally get the anxiety - I went through the exact same thing a few weeks ago. Like others mentioned, "Notice issued" usually just means they're sending you paperwork about some kind of adjustment or review. Since you claimed EIC, it's probably just their standard verification process. The good news is that your return is actually moving through the system rather than being stuck in limbo. Most of the time these notices are pretty routine - could be anything from verifying your income to a small calculation adjustment. Try to stay calm until you get the actual notice in the mail, then you'll know exactly what they need from you. Hang in there! 💪

Hey Ben! I completely understand your anxiety about this - I was in your exact shoes about 3 months ago. Got the dreaded "Notice issued" on my transcript and immediately thought the worst. Turns out it was just a CP05 notice asking me to verify some information since I also claimed EIC. The whole process took about 6-8 weeks but I eventually got my full refund. The waiting is honestly the hardest part, but try to remember that "Notice issued" means they're actually working on your case rather than it just sitting in a pile somewhere. Keep checking your mailbox and once you get the notice, it'll tell you exactly what they need. Most of the time it's way less scary than we imagine it to be! Hang in there - you've got this! 🙏

Has anyone actually looked closely at Form 8889, especially Line 14a and 14b? Line 14a is where you put the total distributions, and 14b is where you put the qualified medical expense portion. If the entire distribution was used for qualified medical expenses, the taxable amount on Line 16 would be zero. Honestly, missing this form when the result is zero added tax is pretty low-risk, but if you're worried, I'd recommend using free fillable forms to complete just Form 8889 yourself. It's not that complicated if you have your 1099-SA and medical receipts. Then file another 1040-X and attach the 8889.

I went through something very similar with my HSA distributions last year. After reading everyone's advice here, I'd strongly recommend filing the second amendment to include Form 8889, even though it won't change your tax liability. Here's why: The IRS absolutely does match 1099-SA forms to tax returns through their automated systems. Even if there's no tax impact, missing forms can trigger CP2000 notices months later. I know Elliott mentioned getting one for a similar situation - it's not fun to deal with even when you have all the documentation. Since your CPA missed including this form on your amended return, they should definitely help fix it without charging you additional fees. This was their oversight, not yours. I'd approach them with that expectation. If you decide to go the DIY route, Form 8889 isn't too complex for a straightforward qualified distribution like yours. You'll report the $3,500 on Line 14a (total distributions), the same amount on Line 14b (qualified medical expenses), which should result in zero taxable distribution on Line 16. Just make sure you keep all those medical receipts organized in case of future questions. The peace of mind from proper reporting is worth avoiding potential IRS correspondence later. Good luck!

Just be aware that even if you miss the 2-out-of-5 year window, you might still qualify for a partial exclusion! This is especially true if your move was work-related. The IRS allows for partial exclusions if the main reason for selling is: 1) Change in place of employment 2) Health reasons 3) Unforeseen circumstances Since you mentioned moving for work reasons, you might qualify even if you miss the full 2-year window. The partial exclusion is prorated based on how long you actually lived there.

This is such a stressful situation but you're smart to plan ahead! I went through something similar in 2022 and learned the hard way that the IRS doesn't give any wiggle room on that closing date - it's the actual date of sale that matters, not when you list or accept an offer. Given that your window closes in June 2026, I'd honestly recommend listing by March 2026 at the latest to give yourself a solid 3-month buffer. Real estate transactions can drag on forever with inspections, appraisals, financing delays, etc. Also, since you moved for your husband's job opportunity, definitely look into whether you qualify for the partial exclusion that others mentioned. If the job move meets the IRS distance requirements (50+ miles), you could still get some exclusion even if you miss the full 2-year window. Document everything about the job-related move - offer letters, distance between old/new workplace, etc. This could be your safety net if the sale timing doesn't work out perfectly.

One thing to keep in mind with the home office deduction for your shed - make sure you're clear on whether to use the simplified method or actual expense method. The simplified method is $5 per square foot up to 300 sq ft maximum ($1,500 total), so for your 240 sq ft shed you'd get a $1,200 deduction. It's super easy but you can't depreciate the shed separately. The actual expense method lets you deduct the actual percentage of home expenses plus depreciation on the shed itself. Given that your shed is a separate insulated structure with its own utilities, you might come out ahead with actual expenses - especially since you can depreciate the shed's value over 39 years as nonresidential real property. I'd calculate both methods to see which gives you the bigger deduction. The actual expense method requires more record keeping but could save you significantly more than the simplified $1,200, especially with a nice setup like you described.

Another consideration I haven't seen mentioned yet - if you're planning to sell your house in the next few years, be aware that claiming home office deduction can have capital gains implications. When you sell, the portion of your home that was depreciated for business use may be subject to depreciation recapture taxes. This might not be a big deal if you're planning to stay put for a long time, but it's something to factor into your decision between the simplified method (which doesn't involve depreciation) versus the actual expense method. The simplified method avoids this issue entirely since you're not depreciating any part of the property. Also, since your shed is a separate structure, you might want to check with your homeowner's insurance to make sure business use is covered. Some policies exclude or limit coverage for business activities, and you don't want to find out after something happens that your embroidery equipment isn't covered.