Just wanted to add one more consideration that hasn't been mentioned yet - make sure you understand whether your grandmother's IRA had any basis (after-tax contributions) in it. If she made any non-deductible contributions to the IRA over the years, part of your distribution might actually be tax-free. You can usually find this information in the estate paperwork or by contacting the financial institution that held the account. They should have records of any Form 8606 filings your grandmother made for non-deductible contributions. If there was basis in the account, you'll need to calculate the tax-free portion of your distribution. Also, since you mentioned this is your first time dealing with an inherited account - don't forget that you'll need to report this distribution on Form 1040, and depending on your tax software, it might generate additional forms like Form 8606 if there was basis involved. H&R Block should handle this automatically once you input the 1099-R information correctly, but it's good to be aware of what forms might be generated so you're not surprised. Good luck with your taxes and congratulations on your upcoming marriage!

As someone who works in retirement plan administration, I can add some clarity on a few technical points that have come up in this discussion. First, regarding the 1099-R coding - you're absolutely correct that Code 4 indicates a death distribution, and this exempts you from the 10% early withdrawal penalty regardless of your age. For the IRA type dropdown, definitely select "IRA/SEP" as others have mentioned. SIMPLE IRAs are quite rare and typically only found in small business settings. One thing I want to emphasize that Emma brought up - checking for basis is crucial but often overlooked. If your grandmother made any non-deductible contributions to her IRA over the years, you could be entitled to receive a portion tax-free. The financial institution should have this information, but unfortunately they don't always volunteer it during the inheritance process. Here's what to specifically ask for: request a copy of any Form 8606 filings associated with the account, or ask if there were any "after-tax contributions" or "non-deductible contributions" made to the IRA. If there were, the institution should provide you with the basis calculation. Regarding the financial aid impact others mentioned - this is real and significant. The $7,300 will count as income on your FAFSA, but as someone suggested, many schools have professional judgment processes for one-time events like inheritances. Definitely reach out to your financial aid office proactively. One last tip: keep all documentation related to this inheritance (1099-R, estate documents, correspondence with the financial institution) in a safe place. You'll want these records for several years in case of any IRS questions.

I'm really sorry for your loss, Nolan. Having to deal with estate cleanup while grieving is incredibly difficult, and it sounds like you're handling a lot right now. Your great aunt is definitely looking out for you by pushing for proper documentation - those donation deductions can add up to significant tax savings, especially when you're clearing out an entire household. The good news is that you don't need to overcomplicate this process. Based on what others have shared here, you're already on the right track with those blank receipts. For most thrift store donations, general categories work fine: "Men's clothing - 6 shirts, 3 pairs pants, 2 jackets" or "Kitchenware - pots, dishes, utensils, small appliances." The IRS just wants to see that you made a reasonable effort to describe what was donated and assign fair values. A few practical suggestions that might help: - Group similar items together when packing for donation - Do rough counts as you pack (much easier than trying to remember later) - Note the general condition (good, fair, excellent) - Keep receipts organized by date and location Remember that you'll only benefit from itemizing these donations if your total itemized deductions exceed the standard deduction ($14,600 for single filers in 2025). With estate cleanouts, you might very well reach that threshold, but it's worth doing a rough calculation first. Take this one step at a time, and don't hesitate to take breaks when you need them. You're doing great managing everything during such a difficult period.

I'm so sorry for your loss, Nolan. Dealing with estate donations while grieving is incredibly challenging, and it sounds like your great aunt is really looking out for you by insisting on proper documentation. From what I've learned through my own experience and what others have shared here, you definitely don't need to list every single item individually. Categories like "women's clothing - 8 blouses, 4 skirts, 3 dresses" or "household items - kitchen utensils, small appliances, linens" are perfectly acceptable for the IRS. The key things to include are: - General category and rough count - Brief condition note (good, fair, excellent) - Date of donation - Name of the charity One thing that really helped me when I was in a similar situation was to take a quick photo before loading donations into the car. It doesn't need to be perfect - just enough to jog your memory later when you're filling out the receipt. Makes the whole process much less stressful than trying to remember what was in each load weeks later. Also, make sure to check whether itemizing will actually benefit you before spending too much time on detailed documentation. With the current standard deduction amounts, you'll need significant donations plus other itemizable expenses to make it worthwhile. Take your time with this process and be gentle with yourself. The paperwork will still be there when you're ready to tackle it.

This is such a frustrating situation, and unfortunately it's way more common than it should be! Your company is legally required to withhold taxes on prizes since the IRS treats them as taxable income (they're considered "supplemental wages"), but they absolutely should have disclosed this beforehand. The fact that there's nothing in your employee handbook about prize taxation and no announcement was made during the raffle is a real communication failure on their part. While they can't avoid the tax requirement, they definitely could have handled the transparency much better. I'd suggest approaching HR diplomatically - focus on improving their process for future events rather than challenging this specific situation. You could say something like "I understand prizes need to be taxed per IRS rules, but could we add this information to the handbook and announce it before future raffles so other employees don't get surprised like I was?" Many companies now make a quick announcement before drawings - just a simple "Please note that all prizes are subject to tax withholding" takes 10 seconds but prevents exactly what you're experiencing. The silver lining is that having taxes withheld now actually protects you from owing a larger amount when you file your return next year. But yeah, the surprise factor is completely understandable and avoidable with better communication!

I totally understand your frustration - this exact situation happened to me at our company's summer BBQ last year! Won a tablet in their raffle and was completely blindsided when I saw the tax deduction on my next paycheck. No one mentioned anything about taxes during the event either. What I learned is that while companies are legally required to withhold taxes on prizes (the IRS treats them as taxable income), yours definitely failed on the communication front. The lack of any mention in your employee handbook or announcement during the raffle is really poor practice. When I brought this up with my HR department, I focused on improving the process for future events rather than challenging the current situation. I said something like "I understand prizes need to be taxed according to IRS requirements, but could we improve communication by adding this to the handbook and announcing it before raffles so other employees don't get surprised?" They were actually very responsive and now they make a brief announcement before each drawing. It's a simple fix that prevents exactly what you're going through. The silver lining is that this withholding is actually saving you from a potentially larger tax bill when you file next year. Still doesn't make the surprise any less annoying though! I'd definitely encourage talking to HR about better transparency for future events.

8 I'm wondering about the lifetime gift exemption - does anybody know if that's going to change in the next few years? I heard it might go down significantly after 2026...

As someone who's been through similar tax situations, I'd recommend documenting everything clearly from the start. Keep records showing the gift amount, date, and recipient - even a simple written note stating "Gift to [friend's name] for Christmas 2025" can be helpful. One thing to consider: if your friend is in serious financial trouble, make sure this gift won't affect any government benefits he might be receiving. Some assistance programs have asset limits that could be impacted by receiving a large gift, even though it's not taxable income to him. Also, since you mentioned having both W-2 and business income, this might be a good time to review your overall tax strategy. The gift itself won't be deductible, but there might be other legitimate business deductions you're missing that could help offset the financial impact of helping your friend out.

The simplified production method is available for most producers, including nursery/greenhouse operations. Your client would likely qualify since they're producing tangible personal property (plants). The key requirement is that they can't have total indirect costs exceeding $200,000. If they qualify, they can use the absorption ratio method where you calculate a percentage based on section 471 costs and additional section 263A costs, then apply that ratio to ending inventory. For nurseries specifically, you'd typically capitalize direct costs like seeds, soil, fertilizer, and direct labor, plus indirect costs like greenhouse utilities, depreciation on growing equipment, and storage costs. The simplified method makes this much more manageable than tracking every individual cost. Just make sure to check if they qualify for the small business exemption first ($27M gross receipts test) - that would eliminate the need for 263A calculations entirely.

For your manufacturing client with $1.2M in inventory, you'll definitely want to check if they qualify for the small business exemption first - if their average annual gross receipts over the past 3 years are under $27 million, they're exempt from 263A entirely, which would save you a lot of headache. If they don't qualify for the exemption, yes, you'll need to capitalize both direct costs (materials, direct labor) and applicable indirect costs. For interest capitalization specifically, you'll need to determine if any of their debt was used to finance production activities. If they have loans specifically for equipment purchases or working capital for inventory, a portion of that interest would need to be capitalized using either the traced debt method (if you can directly trace the loan proceeds) or the avoided cost method for general borrowings. For your construction client, 263A definitely applies to long-term contracts. You'll need to allocate both direct costs (materials, labor for specific projects) and indirect costs (equipment depreciation, job site utilities, etc.) to each individual project. The costs get capitalized until the project is substantially complete, then they become part of cost of goods sold. I'd strongly recommend getting familiar with the simplified methods if your clients qualify - they can save you tons of time compared to detailed cost tracking. The key is understanding which method works best for each client's specific situation.