One detail no one has mentioned yet: Coverdell ESAs have an annual contribution limit of $2,000 per beneficiary. If your CD is maturing and you want to add more money beyond just reinvesting the existing balance, that $2,000 annual limit will apply. 529 plans, on the other hand, have much higher contribution limits - technically up to the projected cost of education in your state, which is usually $300,000+ per beneficiary. So if you're planning to add more funds for future education expenses, the 529 might give you more flexibility there. Also worth noting that Coverdell contribution eligibility phases out based on your income (starts phasing out at $190,000 for joint filers), while 529s have no income limitations.

Another consideration that hasn't been mentioned is state tax benefits. Many states offer tax deductions or credits for contributions to their 529 plans, but not for Coverdell ESAs. Since you're looking at potentially rolling over $7,200, you should check if your state offers any tax incentives for 529 contributions. For example, some states allow you to deduct up to $10,000 or more annually from your state taxes for 529 contributions. Even though this would be a rollover rather than a new contribution, some states still allow the deduction. This could provide immediate tax savings that might outweigh keeping the money in the Coverdell. Also, since your son is in 10th grade, you have time to take advantage of multiple years of potential state tax benefits if you do decide to make additional contributions to a 529 plan after the rollover.

For your $1,350 donation, here's what you need to know: 1. Keep the receipt in your records (don't send it in) 2. You'll need to fill out Form 8283 Section A (since it's over $500 but under $5,000) 3. Make sure your receipt has: - Name of the charity - Date of donation - Description of items - Statement that you received no goods/services in return 4. If your receipt is missing any information, go back to the charity and ask for a complete one I volunteer as a tax preparer and this trips up a lot of people. The biggest mistake is not getting a proper receipt at the time of donation.

Don't forget that you can only claim these deductions if you itemize on Schedule A! If you take the standard deduction (which is $13,850 for single filers in 2023), you can't also claim your donations. A lot of people miss this and try to claim both.

Is anyone else confused about whether closing costs affect the calculation? I sold my house and paid like $25k in realtor fees, title insurance, etc. Can I subtract those from my sale price before figuring out my gain?

Great question about the home improvements! I went through something similar when I sold my primary residence. You absolutely want to add those improvement costs to your basis - they can significantly reduce your capital gain. For the improvements you mentioned (roof and kitchen renovation totaling $42,000), those definitely qualify as capital improvements that increase your basis. Even if you don't have every single receipt, the IRS allows reasonable estimates for legitimate improvements. I'd suggest gathering whatever documentation you do have and making conservative estimates for anything missing. With your numbers: $425K sale price minus selling costs, minus your original $298K purchase price, minus $42K in improvements - you're likely looking at a gain well under the $250K exclusion (or $500K if married filing jointly). One tip: don't forget to include any selling expenses (realtor commissions, title fees, etc.) as they reduce your taxable gain too. TurboTax should handle the forms correctly, but definitely confirm you're reporting it as your primary residence sale to trigger the exclusion properly.

One thing nobody's mentioned yet - make sure you're actually charging significantly below FMV if you're treating this as a "not for profit" rental. IRS might question if you're only $50-100 below market rates. In my experience, they generally look for rentals that are at least 20% below market to qualify for the "not for profit" classification. If you're too close to market rates, they might consider it a regular rental activity where different rules apply. Also, keep good records of comparable rentals in your area to support your FMV determination in case of questions.

I just want to clarify one thing that might be confusing people. Even if you can't deduct losses from a below-FMV rental, you can still potentially deduct expenses that OFFSET the rental income you receive (up to that amount). So if you collect $11,400 in rent annually, you can deduct up to $11,400 in eligible expenses (in that specific order others mentioned - mortgage interest, property taxes, then insurance, etc). This might mean you have zero taxable rental income after deductions, but you can't create a rental loss to offset other income.

For Pennsylvania residents filing 2020 Form 1040 with payment, the correct address is indeed the Cincinnati service center that Javier mentioned. However, I'd strongly recommend double-checking this on the current IRS website since mailing addresses can occasionally change. One thing I haven't seen mentioned yet - since you're filing so late, you might want to consider requesting penalty relief if you have reasonable cause. The IRS can waive failure-to-file and failure-to-pay penalties (though not interest) in certain circumstances like serious illness, natural disasters, or other situations beyond your control. You'd need to include Form 843 (Claim for Refund and Request for Abatement) with your return if you want to request this. Also, make sure you're using the 2020 version of Form 1040 and its instructions, not the current year's form. You can download it from the IRS website under "Prior Year Products." The tax law and forms do change from year to year, so using the correct year's forms is important. Definitely use certified mail with return receipt requested so you have proof of mailing and delivery!

Just to add another perspective - if you're really concerned about your late 2020 return getting lost in the mail or taking forever to process, you might want to consider hiring a tax professional to help you navigate this situation. Many CPAs and enrolled agents have direct lines to IRS practitioner hotlines that can be much more efficient than trying to get through as an individual taxpayer. A tax pro can also help you calculate the exact penalties and interest you'll owe, determine if you qualify for any penalty relief, and ensure your return is prepared correctly to avoid any processing delays or audit flags. Yes, it costs money, but if you're dealing with a complex situation or significant tax liability, the peace of mind and potential savings from their expertise often outweigh the fees. Also, for future reference - the IRS offers payment plans if you can't pay your full tax liability at once. Even for late returns, you can set up an installment agreement either online or by including Form 9465 with your return. This can help manage the financial impact of those accumulated penalties and interest.