Thanks for pointing that out! It's a Traditional IRA, so I'll definitely need to plan for the tax impact of withdrawals. Do you have any suggestions for minimizing the tax hit over the 10-year period?

Since it's a Traditional IRA, you'll want to be strategic about your withdrawals. Consider taking larger distributions in years when you might have lower income from other sources, which could keep you in a lower tax bracket overall. If you have years where you expect higher income (bonuses, other investment gains, etc.), you might take smaller distributions or skip withdrawals entirely during those years. Many people also coordinate their withdrawals with charitable donations that can offset some of the tax impact. Just make sure you're on track to empty the account by the end of the 10-year period.

How would you even check if the RMD was taken for the year they died? The statements I got don't make this clear at all.

Does TaxAct force you to enter all those extra details for interest and dividends that the OP was complaining about? I hate when tax software asks for info that isn't actually required on the real forms.

TaxAct does ask for the payer names for interest and dividends, but it doesn't require all the excessive details like addresses and phone numbers. You can just enter the name and amount for each 1099-INT or 1099-DIV. For IRA distributions, you do need to enter each 1099-R separately, but that's actually correct since the distribution codes can be different. It's much less demanding than some of the other software I've tried.

Does your accountant e-file for you? I'm wondering if they have access to better tax software than what's available to regular consumers.

Can you explain more about the QBI deduction? I thought that was only for certain types of businesses. Does it apply to all self-employed people regardless of what service they provide?

The QBI deduction applies to most self-employed individuals, sole proprietors, partnerships, and S corporations. There are some limitations if you're in certain "specified service trades or businesses" like health, law, accounting, etc., and if your income is above certain thresholds (around $170,500 for single filers in 2022). For most freelancers making under that threshold, including graphic designers, you'll likely qualify for the full 20% deduction on your business profits. The calculation gets more complex at higher income levels or for certain professions, but tax software usually handles this automatically. It's basically free money that reduces your taxable income (though it doesn't reduce self-employment tax), so definitely don't miss out on it!

I've used QuickBooks Self-Employed for 2 years and it's pretty good for the basics. The mileage tracker works well if you remember to use it. The quarterly tax estimator is helpful but sometimes feels a bit off. The expense categorization is decent but you still need to review everything.

I had no idea about these caps! I'll definitely look into that for our state. Do you know if these exemptions are something we can apply for retroactively? We bought in 2022 but never filed for any exemptions because we didn't know about them.

In most places, you can apply for exemptions like homestead retroactively, but usually only for the current tax year and maybe the previous year. It varies by location though. When you call your assessor's office, specifically ask about retroactive applications for exemptions. Also, if this is your primary residence and you've lived there since you purchased in 2022, make sure the county knows that. Sometimes they assess at a higher rate if they think it's a rental or second home. Just having the property correctly classified can make a big difference in your tax bill.

Good point. When I bought my house, the previous owner was a veteran with a disability exemption. My taxes were way higher than what they had been paying, but there was nothing wrong with the assessment itself. Just the exemptions changing.

That's really interesting and something I hadn't considered. The previous owners were an older couple who had lived there for about 15 years, so they might have had some exemptions we don't qualify for. I'll definitely ask about this when I contact the assessor's office!

Do you know if having unfiled tax returns (even when not required to file) can affect things like financial aid applications or student loans? I'm in a similar situation for 2017 and 2018.

Having unfiled tax returns typically won't affect financial aid if you weren't required to file in those years. Most FAFSA forms and financial aid applications have a checkbox indicating "not required to file" for this reason. However, if you were required to file (based on your income and status) but didn't, that could potentially create issues with financial aid verification processes. Some schools select students for verification and may ask for tax transcripts or non-filing letters from the IRS. If you're concerned, you might want to request a "Verification of Non-filing Letter" from the IRS for those years, which confirms you weren't required to file.

Yes, you were likely required to file for 2019. The filing requirement is based on your gross income, not your final tax liability. For 2019, dependents generally needed to file if they earned more than $12,200 in wages OR had unearned income over $1,100 OR if self-employment income was over $400. With $7,500 in wages, you technically may not have needed to file based on the earned income threshold alone. However, if you had any federal tax withheld (check your W-2 box 2), you would want to file to get that money refunded. The standard deduction would likely have eliminated your tax liability, meaning you'd get all withholding back.

Thank you for the clarification! I just checked my 2019 W-2 and I had about $850 withheld in federal taxes. So I guess I missed out on getting that back since it's now 2025 and the three-year window has passed? That really sucks... At least I know for the future.