Do you remember what the monthly payment amount was for your $5,800 balance? I'm trying to figure out if they let you choose how much to pay each month or if they assign an amount.

You generally can choose your monthly payment amount as long as the debt will be paid off within the required timeframe. For amounts under $10,000, that timeframe is 3 years (36 months). So in my case, the minimum payment would have been about $161 per month not including interest and penalties. I actually opted to pay $200 per month to account for the ongoing interest and penalties and to clear the debt faster. They let me choose this amount during the application process. I set up direct debit from my checking account to avoid having to remember to make the payments and to get the lowest setup fee.

Completely agree about filing on time! The failure-to-file penalty is 5% of the unpaid taxes for each month your return is late, up to 25%. The failure-to-pay penalty is much lower at 0.5% per month.

Thank you for pointing this out! He did file on time, he just couldn't pay the full amount at once. I'll definitely suggest he try the online system since that seems to be the consensus here - much easier than trying to call again.

Does Wave let you export reports that work for tax filing? That's been my biggest pain point.

Yes, you can export expense reports as PDFs or spreadsheets that work well for tax filing. The reports show all the transaction details and categories that match up with Schedule C. You can also generate specific date range reports, like quarterly or annual. The only limitation I've found is that the automatic categorization isn't always perfect, so I do have to go in and correct some entries occasionally. But for a free tool, it's pretty solid and has saved me tons of time compared to my old method of manually tracking everything in spreadsheets.

Oof that's rough. What app are you using now that has the cloud sync? I travel a lot for work and my biggest fear is losing all my trip receipts.

That's an interesting approach I hadn't considered! About how much do you typically underwithhold? And do you just make equal quarterly payments, or is there some calculation involved? I'm intrigued by the idea of having more control over our money throughout the year.

We typically underwithhold by about 15% of our total expected tax liability. For someone in your situation, that might mean underwithholding by around $30,000 total for the year, or $2,500 monthly that stays in your accounts instead of going to the IRS. The quarterly payments don't have to be equal if your income fluctuates, but we keep it simple and just divide our expected shortfall by 4. The payment due dates are April 15, June 15, September 15, and January 15 of the following year. You can make them online at the IRS website using Direct Pay or EFTPS. Just make sure you're meeting that safe harbor of 110% of your previous year's tax liability (since you're over the $150k AGI threshold). That's the easiest way to guarantee no penalties regardless of this year's actual liability.

I use it all the time and find it really accurate, but it's crucial that you include ALL income sources, not just your W-2 jobs. Make sure you're entering things like investment income, rental properties, etc. The other key is to update it quarterly since your situation might change throughout the year.

Is there any limit to how much you can take out after 65? And do you HAVE to take RMDs like with traditional IRAs? I'm trying to decide if I should just max my 401k or split between that and HSA.

There's no limit to how much you can withdraw after 65, and one of the best parts is that HSAs do NOT have Required Minimum Distributions (RMDs) like traditional IRAs. You can let the money grow as long as you want without being forced to withdraw it. That's why many financial planners recommend maxing out HSAs before even maxing 401(k)s beyond the employer match. The HSA is the only account that offers triple tax advantages: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. Even using it for non-medical expenses after 65, it's at least equivalent to a traditional IRA.

Your dentist unfortunately gave you incorrect information. HSA funds generally cannot be used for dental insurance premiums either, as they fall under the same restrictions as health insurance premiums. The only exceptions are the ones already mentioned (unemployment, COBRA, over 65, or long-term care). However, you CAN use HSA funds for actual dental procedures and treatments that aren't covered by insurance! So while you can't pay the premium with HSA money, you can use it for copays, deductibles, and procedures that insurance doesn't cover or only partially covers.

The property is in Arizona. I hadn't even thought about state-specific taxes, though. Do they handle the basis calculation differently there?

Arizona doesn't have a state inheritance tax or estate tax, so you're in luck there! You'll only need to worry about federal taxes on any gain above your stepped-up basis. Arizona follows the federal rules for stepped-up basis, so whatever fair market value you establish for federal tax purposes will also work for your Arizona state tax return. Just make sure you keep thorough documentation of how you determined the property's value at the time of inheritance.

That's terrible advice and could get OP audited. The IRS specifically looks for people claiming no gain on inherited property sales. The stepped-up basis has to be established at date of death, not date of sale. If there was significant appreciation between those dates (like a developer suddenly becoming interested), claiming no gain would raise red flags.