Great discussion here! I'm dealing with a similar inherited IRA situation myself. One thing I wanted to add - make sure to check if your inherited IRA has any specific beneficiary designation rules that might affect your options. In my case, I inherited a traditional IRA from my grandmother in 2018, and when I looked into transferring it for better investment options, I discovered that the original beneficiary form had some specific language about investment restrictions that the bank had never mentioned. It turned out those restrictions were actually invalid under current IRS rules, but it took some back-and-forth with the legal department to get it sorted out. Also, for anyone considering the trustee-to-trustee transfer route - definitely shop around for fees. Some institutions charge annual maintenance fees for inherited IRAs that can really eat into smaller balances like yours. I found that some of the major discount brokerages (Schwab, Fidelity, Vanguard) don't charge annual fees for inherited IRAs, which makes a big difference over time. The key is making sure whoever you transfer to understands inherited IRA rules and can properly maintain the required distribution schedule. Not all institutions are equally experienced with these accounts.

I'm in a very similar situation with an inherited IRA from my father that's been sitting in a low-yield savings account for years. After reading through all these responses, I'm convinced I need to do a trustee-to-trustee transfer to get better growth. One question I haven't seen addressed - if I transfer my inherited IRA to a brokerage for better investment options, am I still locked into taking the same annual RMD amounts? Or can the required minimum distributions be recalculated based on the new account value and investment performance? Also, has anyone had experience with how long these trustee-to-trustee transfers typically take? I'm worried about missing an RMD deadline if the transfer gets delayed between institutions.

21 Has anyone actually received their W-2 with gift cards included before? My company has been giving us $100 Target cards monthly for meeting attendance goals but nothing shows up different on my paystubs. Now I'm worried they're not tracking it properly.

Just went through this exact situation last year. My company was giving out $50-100 gift cards for overtime shifts and none of us realized they had to be reported as income. Come tax time, my W-2 showed about $1,400 more in Box 1 than I was expecting from my regular paychecks. The key thing to know is that ANY gift card from your employer - whether it's for working extra shifts, meeting goals, or holiday bonuses - gets treated as taxable wages by the IRS. There's no "gift" exception when it comes from your workplace. Your $2,700 will definitely show up on your W-2 and you'll owe taxes on it at your regular income tax rate. My advice: start setting aside money now for the tax bill, or talk to payroll about increasing your withholding on regular paychecks to cover it. Don't wait until April to deal with this - I ended up owing an extra $350 in taxes that I wasn't prepared for.

Has anyone reported them to the IRS Office of Professional Responsibility? This kind of behavior reflects badly on the whole tax preparation industry and erodes public trust.

This is exactly why I always tell new tax professionals to thoroughly research any platform before signing up. The red flags you mentioned - promises of high earnings without clear payment terms, mysterious client "cancellations" after work is completed, and that financial advisor deliberately preventing filings - are classic signs of exploitative business practices. As someone who's been in tax preparation for over a decade, I've seen legitimate platforms come and go, but the good ones always have transparent fee structures and pay for completed work regardless of filing status. The work product has value whether the client ultimately files or not. Document everything you can - emails, screenshots of their income promises, records of completed returns, communication with that financial advisor. This evidence will be crucial for your regulatory complaints. Also consider reaching out to other tax professionals who used the platform - you're probably not the only one experiencing this. The tax preparation industry needs to do better at protecting professionals from these predatory business models. Thanks for sharing your experience to warn others.

Just to add one more important point that hasn't been fully covered - make sure you keep detailed records of your qualified education expenses! The IRS can ask for documentation to prove that your early withdrawal was indeed used for qualifying educational costs. Keep receipts for tuition, fees, books, supplies, and required equipment. If you're audited, you'll need to show that the withdrawal amount didn't exceed your actual qualified expenses for that tax year. Also, be aware that if you receive other tax-free educational benefits like scholarships or employer tuition assistance, those might reduce the amount you can claim as qualified expenses for the penalty exception. I'd recommend creating a dedicated folder (physical or digital) to store all education-related receipts and your 1099-R from Fidelity when you receive it. This will make tax filing much smoother and give you peace of mind that you have proper documentation.

This is such a helpful discussion! I'm actually considering a similar situation but for graduate school expenses. One thing I haven't seen mentioned yet is that you might want to check if your education expenses qualify for any education tax credits (like the American Opportunity Credit or Lifetime Learning Credit) in addition to using the IRA withdrawal penalty exception. However, there's an important catch: you can't "double-dip" on the same expenses. If you use your IRA withdrawal to pay for tuition that you're also claiming for an education tax credit, you need to reduce your qualified education expenses for the penalty exception by the amount you're claiming for the credit. This coordination between different tax benefits can get complicated, so it might be worth running the numbers both ways - sometimes it's better to skip the education credits and maximize your qualified expenses for the IRA penalty exception, especially if you're in a higher tax bracket where the penalty savings outweigh the credit benefits. Also, @Saleem Vaziri, since you mentioned you're working with Fidelity, they should be able to provide you with a worksheet that helps calculate exactly how much of your withdrawal will be taxable based on your contribution history. Don't hesitate to ask them for this - it's a standard service they provide for IRA distributions.

The real issue here that nobody has mentioned is properly documenting your time! If you get audited and claim REPS, the IRS will want to see detailed logs of how you spent those 750+ hours. I learned this the hard way. Keep a detailed diary or use a time-tracking app specifically for your real estate activities. Document date, time spent, and exactly what you did. This includes time spent as a realtor if you're claiming those hours toward your REPS qualification.

Based on what you've described, you likely DO qualify for REPS, but your accountant is right that it's more complicated than it initially appears. Your realtor hours absolutely count toward the 750+ hour requirement - that's established case law. The IRS considers all real estate activities together for this test. So between your full-time realtor work and managing those 2 local properties, you should easily meet the hour threshold. However, the material participation requirement is evaluated separately for each property or group of properties. This is where the grouping election mentioned by others becomes crucial. You can elect to treat all your rental properties as a single activity on Form 8582. Once grouped, you only need to materially participate in the group as a whole, not each individual property. Even with property managers, you likely spend time on oversight activities - reviewing financial reports, approving major repairs, making strategic decisions about rent increases or tenant screening, etc. All of this counts toward material participation hours if properly documented. I'd suggest getting a second opinion from a CPA who specializes in real estate taxation. Many general accountants aren't familiar with the nuances of REPS and grouping elections. The tax savings potential here is significant enough to warrant consulting with a specialist.