One thing that hasn't been mentioned yet is the importance of understanding your state tax situation too. Some states have no income tax at all (like Texas, Florida, Washington), while others tax investment income heavily. This can significantly impact your overall tax burden on those index fund distributions. Also, as you get closer to retirement in 20-25 years, you might want to consider gradually shifting some holdings from taxable accounts to tax-advantaged accounts through Roth conversions during lower-income years. This can help manage your tax liability in retirement when you'll be drawing down these investments. For someone just starting out with a long timeline like yours, I'd really emphasize maxing out all tax-advantaged space first (401k, IRA, HSA if available) before moving to taxable accounts. The tax-free growth over 25 years will likely outweigh the flexibility benefits of having everything in taxable accounts.

One additional consideration for your long-term strategy is tax-loss harvesting. Since you're planning to hold for 20-25 years, there will inevitably be periods where some of your index fund holdings are at a loss compared to your purchase price. You can strategically sell those positions to realize the losses (which offset gains elsewhere or up to $3,000 of ordinary income annually), then immediately buy a similar but not identical index fund to maintain your market exposure. For example, if you hold an S&P 500 fund that's down, you could sell it and buy a total stock market fund or vice versa. This technique can help reduce your annual tax burden over the decades, especially in volatile market periods. Just be aware of the "wash sale rule" - you can't buy the exact same security within 30 days of selling it for a loss, or the IRS disallows the tax benefit. Many brokerages now offer automated tax-loss harvesting services for taxable accounts, which can be worth considering given your long investment timeline and the potential cumulative tax savings over 25 years.

Has anyone tried using the IRS Tax Withholding Estimator? It helped me figure out my withholding issues last year.

This is a really common issue for tipped employees, and you're smart to be thinking ahead about potential tax liability. The inconsistent withholding happens because your paycheck amount varies so much with tips - when tips are high, there's often not enough in your actual hourly wages to cover all the required withholdings. One thing that might help is talking to your payroll person about adjusting your W-4 to have an additional flat amount withheld each pay period, regardless of your tip income. You could also consider opening a separate savings account specifically for taxes and automatically transferring a percentage of your weekly earnings there. Keep detailed records of all your tip income too - you'll need accurate numbers for tax filing, and it'll help you calculate how much you should be setting aside. Generally, putting away 20-25% of your total income (wages + tips) for taxes is a safe bet for most servers.

Has anyone actually completed one of these rollovers yet? I'm trying to figure out the paperwork side of things. Do I need to contact both the 529 provider and my Roth IRA company? Is there a specific form to fill out?

This is such a timely question! I went through this exact situation last year with my own leftover 529 funds. Just to add to what others have said - make sure you also check the specific timing requirements. The 529 account needs to have been open for at least 15 years, but here's something I didn't realize initially: any contributions made to the account in the last 5 years (and their earnings) are NOT eligible for the rollover. So if your parents added money to your sister's 529 within the last 5 years, that portion would need to stay in the account. The rollover can only include contributions that are at least 5 years old plus any earnings on those older contributions. This might affect how much of that $40,000 is actually eligible for the Roth conversion. I had to go back through my 529 statements to figure out which contributions qualified - definitely worth checking before you start the process!

This thread has been incredibly helpful! As someone who's been researching this exact scenario for months, I want to add one practical consideration that might influence your decision timing. With current interest rates, the financing cost for your construction loan could significantly impact the overall economics. If you're planning to claim business interest deductions, make sure you understand how the IRS treats interest during the construction period versus after the building is placed in service. During construction, the interest typically needs to be capitalized (added to the building's cost basis) rather than deducted immediately. Only after you start using the garage for business can you begin deducting the ongoing loan interest. This could affect your cash flow projections, especially if construction takes several months. Also, given all the great advice about cost segregation and documentation, consider hiring a tax professional who specializes in this area BEFORE you start construction. They can help you structure the project and invoicing in a way that maximizes your depreciation benefits from day one. It's much harder (and sometimes impossible) to go back and restructure things after the fact. The point about potential zoning issues is crucial too. I'd recommend getting written confirmation from your local zoning office that your planned business use is permitted. Some areas have restrictions on the types or volume of commercial deliveries to residential properties, which could impact your importing business model.

As someone who went through a similar garage conversion project for my home-based business, I wanted to share a few additional insights that might help with your decision. One thing that really caught my attention in your post is that you're planning to use the space for TWO distinct purposes - moving your existing office AND storing inventory for a completely new business. This actually creates some interesting opportunities for tax optimization that haven't been fully explored in the thread. Since your existing sole proprietorship already qualifies for home office deductions, you have an established business use pattern that strengthens your position with the IRS. When you move that office to the garage, you're not creating a new business expense - you're relocating an existing one. This continuity can be helpful if the IRS ever questions your business use claims. For the importing business storage portion, consider starting small and documenting your growth. Even if you build the full garage now, you could initially designate a smaller storage area and expand the business use percentage as your inventory grows. This creates a clear paper trail showing legitimate business expansion rather than speculative space allocation. One practical tip: install a separate electrical meter for the garage if possible. This makes it much easier to track and deduct utilities, and it provides clear documentation of business versus personal use. The additional upfront cost often pays for itself in cleaner record-keeping and stronger audit defense. The key is treating this as a business investment decision, not just a tax strategy. Make sure the numbers work even without the tax benefits, then view the depreciation and deductions as a bonus rather than the primary justification.

Having worked as a tax preparer specializing in estate returns, I wanted to address a few key points that could save you time and potential complications. First, your plan to use calendar year reporting is absolutely correct for a combined initial/final 1041. This keeps everything straightforward and aligns perfectly with TurboTax Business's default settings. Regarding the executor/EIN issue, you're handling this correctly. The EIN serves as the estate's tax identifier, and having one executor listed as the fiduciary on the 1041 is standard practice even with multiple legal co-executors. Your co-executor status remains legally intact regardless of whose name appears on the tax forms. One critical item I'd emphasize that others have touched on: verify that your 1099-B reflects the proper stepped-up basis. With inherited securities, the cost basis should be the fair market value on the date of death, not your stepmother's original purchase price. If the brokerage used the wrong basis, you could be overpaying taxes significantly. Also, with $7,900 in taxable income, your estate will likely owe around $1,300-1,600 in federal taxes due to the compressed tax brackets that apply to estates. I'd strongly recommend making an estimated payment before April 15th to avoid underpayment penalties, especially since estates don't have prior-year returns to rely on for safe harbor protection. Your strategy of having the estate pay all taxes directly rather than issuing K-1s is perfect for this situation and will greatly simplify the process for everyone involved.

As someone who recently went through estate administration for the first time, I wanted to share a few practical tips that might help streamline your process. Regarding your calendar vs fiscal year question, I'd definitely echo what others have said about choosing calendar year. Since you're filing both the initial and final return for a straightforward estate, this will make everything much cleaner in TurboTax Business. One thing I wish I'd known earlier: create a detailed timeline of all estate activities from the date of death through final distributions. This helped me tremendously when TurboTax asked for specific dates during the filing process. You'll need the probate opening date, when letters testamentary were issued, and various other milestones. Also, don't overlook potential estate administration deductions on the 1041. Things like attorney fees, court costs, and other expenses directly related to settling the estate can reduce your tax liability. With about $7,900 in gains, every deduction helps. Regarding the stepped-up basis issue that several others mentioned - this is crucial! I had a similar situation where the brokerage initially used my parent's original cost basis instead of the fair market value at death. Getting this corrected saved us over $2,000 in taxes. Don't assume the 1099-B is correct without verifying. Finally, consider setting aside about 20% of your taxable gains for estimated taxes. Estates face higher tax rates than individuals, so $1,500-1,800 would be a reasonable conservative estimate for your tax liability. Better to overpay slightly and get a refund than face underpayment penalties.