Oh man, that's concerning. I have no idea if the executor did that. It's my uncle (dad's brother) handling everything. I'll definitely ask him about this. How long do they usually need to wait before distributing?

The waiting period varies by state, but it's typically between 3-6 months after publishing notices to creditors. In Texas, I believe it's 4 months. A properly handled estate administration should include this step, but family-member executors sometimes skip parts of the process if they're not working with an attorney. Just check that your uncle published the required notices and waited the appropriate time. If he worked with an estate attorney, they would have ensured this was done correctly.

You're most likely fine. If it was a straightforward inheritance (not from an IRA or retirement account), you typically don't need to report it on your tax return at all. Inheritances generally aren't considered taxable income to the beneficiary. The only exception would be if you inherited something that was generating income after the person died (like interest, dividends, rental income, etc.) - in that case, you would need to report that income, but not the inheritance itself.

But what about when you have to transfer money back to your bank? Doesn't that create a paper trail linking you to the exchange?

Yes, there's always a paper trail when you move money back to your bank, but that doesn't change the main point. The banking system knows you received funds from somewhere crypto-related, but that alone doesn't tell them which specific exchange you used or whether that exchange was "approved." Most important thing is just to report all your income accurately. The IRS wants their cut of your gains - that's their primary concern. They're not coordinating with other agencies to check if you used a VPN to access certain websites. They have bigger fish to fry than retail traders who are actually paying their taxes properly.

This is partly true but misleading. Only US-regulated exchanges are required to issue 1099-K forms. International exchanges that don't have US operations typically don't issue these forms because they're not subject to US reporting requirements. That's part of why they can offer coins not available on US platforms.

Hold up - can you really deduct part of your phone bill and internet if you do some freelance work on the side? How does that even work? Like if I do DoorDash on weekends, can I write off part of my phone bill since I use the app?

This is actually really bad advice. Most ppl aren't disciplined enough to save that extra money each paycheck. Getting a refund is forced savings for a lot of people. If your getting the money in small amounts each check, lots of ppl just spend it without noticing. I purposely have extra withheld so I get a big refund every year. Use it to pay down debt or take a vacation. Different strategy works for different folks.

Thanks for this suggestion. If I recharacterize to Traditional, would I need to file any special forms with my taxes this year? And can I just open a Traditional IRA now even though the contribution was technically made in 2023?

Yes, you would need to file Form 8606 with your tax return to report the non-deductible Traditional IRA contribution. This is important because it establishes your "basis" in the Traditional IRA, which will matter for tax purposes if you ever convert that money to a Roth in the future. You can open a Traditional IRA now even though the contribution was for 2023. The recharacterization process will treat it as if you made the contribution to the Traditional IRA in the first place. Just make sure you complete the recharacterization before your tax filing deadline (including extensions).

That's exactly what happened. OP said FreeTaxUSA calculated they could contribute $4000 each rather than the full $6500. So they're in the phase-out range, not completely over it. They contributed $4500 each, which is $500 over what's allowed at their income level.

I'm so sorry that happened to you. This is exactly the kind of situation I'm worried about. Were there any options to renegotiate the loan terms when you realized you were having trouble making payments?

Unfortunately, 401k loans have very rigid repayment terms set by the IRS and your plan administrator. Unlike other loans, there's typically no hardship program or way to restructure the debt. The only flexibility my plan offered was a one-time 3-month suspension of payments, but that just meant larger payments later to catch up. Once you miss payments beyond what your plan allows (in my case, it was 90 days), the outstanding balance is automatically considered a distribution. At that point, there's nothing you can do - the money is considered withdrawn, triggering the taxes and penalties. The worst part is this usually happens when you're already facing financial difficulties, making the tax consequences even harder to manage.

I had the opposite experience! Took a $15k loan to consolidate high-interest debt, and seeing that automatic payment come out each month was actually motivating. Paid it back in 3 years and it helped me build better financial habits. I think it depends on what you're using it for and your personal discipline.