I was in a similar situation with an old HSA from a previous employer that had around $800 just sitting there. I felt like I was throwing money away since I rarely got sick enough to use it for traditional medical expenses. What really helped me was realizing how broad the definition of "qualified medical expenses" actually is. I ended up using my HSA funds for things I never thought would qualify - like replacing my old contact lenses, buying a new thermometer, stocking up on over-the-counter allergy medication, and even getting a teeth cleaning that my insurance didn't fully cover. The key insight for me was that you don't have to use HSA funds immediately when you have a medical expense. You can pay out of pocket and keep the receipts, then reimburse yourself from your HSA months or even years later. This gives you way more flexibility - you can let the money grow while building up a "bank" of eligible expenses to draw from whenever you actually need the cash. Given that you'd face both income tax AND a 20% penalty on non-qualified withdrawals, I'd really recommend exploring your eligible expenses first. Even if you can't use all $650 right now, using some of it legitimately is better than losing 20%+ to penalties.

I totally get your frustration with having money locked up in an HSA that feels unusable! As someone who's been in a similar situation, I'd strongly advise against risking the penalties though. Even though $650 seems small, the IRS does track HSA distributions through Form 1099-SA, and you'd be looking at income tax PLUS that 20% penalty if you're under 65. That could easily eat up $150+ of your $650. Here's what worked for me: I started thinking more creatively about eligible expenses. Did you know you can use HSA funds for things like band-aids, thermometers, contact lens solution, over-the-counter pain relievers, and even SPF 15+ sunscreen? I went through my old receipts and found tons of stuff I'd paid for out-of-pocket that actually qualified. Also, there's no rush to spend it! HSA money doesn't expire, and you can reimburse yourself years later for qualified expenses. So even if you pay for something medical out-of-pocket today, you can withdraw that amount from your HSA whenever you actually need the cash - no time limit. Trust me, keeping that money for legitimate medical uses (even if they're broader than you think) is way better than losing 20% to penalties. Your future self will thank you when you have an unexpected medical bill!

Great writeup about your experience! I had a similar issue with 1040.com last year but with California state forms - they weren't ready until late February. Really frustrating when you're trying to file early. One thing I'd add for anyone considering these platforms: check if your state has its own free filing option directly through their tax department. California's CalFile is completely free and worked great for me, though it's pretty basic. Might be worth checking if New York has something similar before paying the $24 FreeTaxUSA fee. Also, for future reference, the IRS Free File page usually notes when state forms aren't available yet - it's in small print under each provider's description. Easy to miss but can save you time if you check before starting.

Really helpful comparison, thanks for sharing! I'm in a similar boat - was considering 1040.com because of the "free state filing" promise but this makes me think twice. The timing issue with state forms is a real problem when you're trying to file early. One thing I've learned from past tax seasons is that it's worth having a backup plan ready. Even if a platform looks perfect on paper, there's always something that can go wrong - server issues, missing forms, unexpected fees, etc. Having already researched 2-3 options means you're not starting from scratch when you hit a roadblock. For what it's worth, I've been happy with FreeTaxUSA for the past two years. The $24 state fee stings a little but their customer support has been solid the few times I've needed help, and their audit support option gives me peace of mind. Sometimes paying a small fee is worth avoiding the headache of dealing with a platform that's not quite ready for your situation.

Anyone know if the timing of the quitclaim affects how the IRS views this? I got my house in a divorce settlement last year but the quitclaim wasn't filed until months after our divorce was finalized. Worried this might cause problems when i eventually sell.

Just want to add some clarity on the capital gains exclusion that was mentioned earlier. Since you lived in the house from 2016-2020 (4 years) and then continued living there after the quitclaim until you sold in 2023, you definitely meet the 2-out-of-5-years requirement for the $250k exclusion as a single filer. Given your numbers: Original purchase $295k, sale price $495k, that's a $200k gross gain. But with your adjusted cost basis (original half + buyout amount + those improvements you mentioned), plus the $250k exclusion, you'll likely owe little to no capital gains tax. One thing to watch out for - make sure your divorce decree explicitly states the property transfer was part of the settlement. This helps establish that it was "incident to divorce" and keeps the transfer itself tax-neutral.

This is such a helpful thread! I'm dealing with a similar situation where my elderly parents have their assets in a revocable trust, and I've been worried about the tax implications when they pass. One thing I wanted to add that might be helpful for others - make sure you understand the difference between a "living trust" and a "testamentary trust." A living trust (which sounds like what your parents have) is created during their lifetime and can be revocable or irrevocable. A testamentary trust is created through a will and only takes effect after death. Also, for anyone reading this thread, I'd strongly recommend keeping detailed records of the original basis of assets when they're transferred into the trust. Even though you'll get a step-up in basis when your parents pass, having those records can be crucial if there are any questions or audits down the line. The IRS has specific forms (like Form 706 for large estates) that require detailed asset valuations, so start thinking about how you'll document fair market values at the time of death. For publicly traded stocks it's easy, but for things like real estate or collectibles, you might need professional appraisals.

This is exactly the kind of detailed discussion I was hoping to find! I'm in a very similar situation with my parents' revocable trust, and reading through everyone's experiences has been incredibly enlightening. One aspect I haven't seen mentioned yet is the importance of understanding your state's specific trust laws. While the federal tax treatment is generally consistent (revocable trusts being ignored for tax purposes during the grantor's lifetime), some states have their own estate tax thresholds that are much lower than the federal exemption. For example, in states like Massachusetts, New York, or Oregon, you might need to file state estate tax returns even if you don't meet the federal threshold. This could affect planning decisions, especially if your parents are considering moving to a different state in retirement. Also, for anyone dealing with jointly-owned assets in the trust, make sure you understand how your state treats property ownership between spouses. The community property vs. common law distinction that Giovanni and others mentioned can make a huge difference in how much of a step-up you get when the first spouse passes away. Thanks to everyone who shared their experiences with the various services and tools - it sounds like there are some good resources out there for getting professional guidance without breaking the bank!

I had a very similar experience and can totally relate to your stress! The key insight that helped me was realizing that since you never actually attended the class, your $1,100 payment was essentially settling a debt rather than paying for educational services. This is important because the 1098-T is specifically for claiming education tax credits (like the American Opportunity Credit or Lifetime Learning Credit), which require you to be actively enrolled and taking courses toward a degree or certificate. Since you didn't attend the class, you wouldn't qualify for these credits anyway. Think of your collections payment like paying off any other debt to the school - parking fines, library fees, etc. It's not a qualified education expense that needs to be reported on your tax return. Keep your receipt from the collections payment for your records, but you can file your taxes normally without the 1098-T form. The college's inability to issue one without your SSN won't cause any IRS issues since you're not claiming education benefits anyway. You can skip that 3-hour drive and all the administrative headaches!

I can definitely understand your frustration with this situation! Based on what you've described, you're likely worrying about this more than you need to. Since you never actually attended the class and your $1,100 payment was made to settle a collections debt rather than for active educational services, this wouldn't qualify as a qualified education expense for tax purposes. The 1098-T form is primarily used to claim education tax credits like the American Opportunity Credit or Lifetime Learning Credit, but these require you to be enrolled in and actively pursuing coursework. Your payment to collections is more similar to paying off any other type of debt to the institution - like parking fines or library fees. Keep your receipt from the collections payment for your records, but you don't need to report this on your tax return or chase down that 1098-T form. The college's inability to issue the form without your SSN won't cause any problems with the IRS since you're not claiming education-related tax benefits anyway. You can file your taxes normally and save yourself that 3-hour drive to campus!