Has anyone mentioned that if the house was the father's primary residence, he might have qualified for the $250,000 capital gains exclusion? Might not need to worry about basis at all.

The property tax assessment approach should work fine for your situation, especially since the difference between your 2021 assessment ($187,500) and 2024 sale price ($195,000) is relatively small. That $7,500 gain over 3 years actually suggests the assessment was pretty close to market value at the time of death. A few practical tips from someone who's been through this: First, make sure you have a copy of the official 2021 property tax assessment document - not just the amount, but the actual assessment notice. Second, consider pulling a few comparable sales from late 2021/early 2022 in your neighborhood as supporting documentation. You can find these on sites like Zillow, Redfin, or your county's property records website. The IRS generally accepts property tax assessments for establishing FMV, especially when they're reasonable compared to eventual sale prices. In your case, the numbers tell a logical story. Just keep good records and you should be fine. The stepped-up basis is one of the few tax breaks that actually works in your favor!

Don't forget that you need to keep really good records if you're deducting medical expenses! I learned this the hard way when I got audited two years ago. Make sure you have proof of when you actually paid each bill (receipt with date or credit card statement). Also, the threshold is 7.5% of AGI which is higher than it used to be. For many people it doesn't make sense to itemize anymore unless you have really high medical costs or other big deductions like mortgage interest.

Great thread everyone! I just wanted to add that if you're using HSA (Health Savings Account) funds to pay for medical expenses, the same timing rules apply. You can only reimburse yourself from your HSA for expenses that were incurred after your HSA was established, but the key is when you actually paid for the expense, not when the service was performed. So if you had that December 2024 procedure but paid in January 2025, you could reimburse yourself from your 2025 HSA contributions for that expense. Just make sure to keep good records showing the service date AND payment date, especially if you're not reimbursing yourself immediately. The IRS allows you to reimburse yourself years later as long as you have proper documentation. Also, remember that HSA reimbursements are tax-free, so if you're eligible for an HSA, that might be a better option than trying to itemize medical deductions on Schedule A, especially with that 7.5% AGI threshold.

I went through this exact same frustration about 3 weeks ago! The transition caught me completely off guard too. I ended up choosing LOGIN.GOV and it was actually pretty straightforward once I got past the initial confusion. Here's what I learned: your old EFTPS account and all your information is still there - they just added this new security layer on top. After setting up LOGIN.GOV (took about 10 minutes), I was able to access my same account with all my payment history, saved bank accounts, and even my scheduled quarterly payments. The IRS apparently made this change as part of a broader security upgrade across all their systems. While it was annoying at first, I have to admit the new authentication feels much more secure than the old PIN system. I'd recommend just biting the bullet and setting up one of the new login methods - LOGIN.GOV seems to be the more popular choice based on what I've seen here. Don't worry about losing your account data - it's all still there waiting for you once you get through the new login process!

I went through this same transition about two weeks ago and wanted to share my experience since it sounds like a lot of people are dealing with this surprise change. The new LOGIN.GOV requirement initially frustrated me too, but once I got through the setup process, I actually prefer it to the old PIN system. The multi-factor authentication gives me more confidence that my tax payment information is secure, especially with all the identity theft issues we hear about these days. One thing that helped me was doing the LOGIN.GOV setup on a desktop computer rather than my phone - the interface seemed cleaner and easier to navigate. The verification process was straightforward: just email confirmation and a text message code to my phone. After connecting through LOGIN.GOV, I was relieved to find all my saved payment methods, scheduled payments, and payment history exactly where I left them. The IRS definitely could have communicated this change better to users, but the actual transition preserves all your existing account information. For anyone still on the fence about making the switch, I'd recommend just getting it done before your next payment deadline. It's a one-time setup that takes about 15 minutes, and then you're back to making payments as usual with better security.

Has anyone maximized their health insurance deductions? I heard I can deduct premiums as self-employed but my tax software keeps giving me different answers.

Great thread! As someone who's been through the tax optimization journey, I'd add a few things that saved me significant money: 1. **Equipment Section 179 Deduction** - You can potentially deduct the full $1,800 laptop cost in year one instead of depreciating it over several years. This is huge for new businesses buying equipment. 2. **Business meals are 100% deductible now** (not just 50%) if you're eating alone while traveling for business or with clients. Those coffee shop meetings you mentioned could add up! 3. **Professional development** - Any courses, certifications, or conferences related to graphic design are fully deductible. Even YouTube Premium if you use it for tutorials! 4. **Bank fees and credit card interest** - If you have a business account or use credit for business expenses, those fees/interest are deductible. The key is documentation. I use a simple phone app to photograph every receipt and note the business purpose immediately. Takes 30 seconds but saves hours during tax season. One warning: Don't get too aggressive with home office deduction percentages. The IRS does audit these, and you want to be able to justify your square footage claims with measurements and photos.

Does anyone know if TaxAct handles the home sale exclusion the same way as TurboTax? I'm in a similar situation but using different software.

@Hiroshi, based on your situation, you should be in great shape! With 6+ years of primary residence and only $78k in profit, you're well under the $500k exclusion limit for married filing jointly. In TurboTax, look for the "Federal Taxes" section, then "Wages & Income," and you should see "Investment Income" or "Less Common Income." There will be a section for "Stocks, Mutual Funds, Bonds, Other" - click "Start" there and look for "Sale of Your Home" or similar wording. The software will ask you about: - Purchase date and price - Sale date and price - Any major improvements you made - How long you lived there as primary residence Don't stress about finding a separate "worksheet" - TurboTax handles all the calculations behind the scenes using Forms 8949 and Schedule D. Just answer their questions honestly and the software will automatically apply the Section 121 exclusion. One tip: gather receipts for any major home improvements you made over those 6 years (new HVAC, kitchen remodel, roof, flooring, etc.) as these increase your basis and further reduce any potential taxable gain, though you likely won't need them given your numbers. You've got this! The exclusion was designed for exactly your situation.