I want to add a perspective from someone who actually attempted this exact scenario about 5 years ago. I received a similar inheritance ($95k) and had the same thought about prepaying property taxes to "set it and forget it." After calling around to multiple counties and even consulting with a tax attorney, here's what I discovered: Beyond the 1-2 year prepayment limitations that others have mentioned, there's another issue nobody talks about - what happens if you move or sell your property? I found out that getting refunds for prepaid property taxes can be a bureaucratic nightmare that takes months or even years to resolve. Some counties require you to file specific forms, provide proof of sale, and then wait for their fiscal year-end processing to get your money back. One county told me refunds are only processed twice per year! This completely changed my perspective. Instead of prepaying, I put $20k from my inheritance into a dedicated high-yield savings account earning 4.8% and set up automatic monthly contributions of $350 to build each year's tax payment. Five years later, I've earned over $4,500 in interest while maintaining complete flexibility. When I moved to a different state last year, I simply closed the account and had immediate access to all the funds. No forms, no waiting, no bureaucracy. Sometimes the simplest approach really is the best one.

I've been reading through this excellent discussion and wanted to add one more consideration that might be helpful for your decision-making process. As someone who works in estate planning, I often see clients with windfalls like yours struggle with the psychological aspect of "doing something meaningful" with an inheritance. The desire to prepay property taxes for a decade seems to stem from wanting to create lasting financial security and peace of mind, which is completely understandable. However, what I've found is that clients who set up systematic approaches (like the tax sinking fund everyone's discussing) actually report higher long-term satisfaction than those who make one big "set it and forget it" move. The monthly automation gives you an ongoing sense of financial responsibility and progress, while the growing account balance provides visible proof that your inheritance is working for you. Consider this: with your $87,000 inheritance, if you allocated $15,000 to jumpstart a property tax fund and invested the remaining $72,000 in a diversified portfolio earning 6-7% annually, you'd potentially have over $115,000 by retirement while still having your property taxes fully covered through the sinking fund approach. That's a much better legacy from your inheritance than simply having prepaid taxes. The psychological peace of mind you're seeking is absolutely achievable - just through a smarter financial structure that preserves and grows your inheritance rather than parking it with the county.

I'm currently experiencing this exact situation and wanted to add my timeline to help others! My TC 571 code just appeared on my transcript on March 19th, so I'm at the very beginning of what everyone has documented as the 8-14 day waiting period. Like so many others here, I initially called the IRS and got the frustrating "wait for system updates with no timeline" response. Finding this thread has been such a relief - seeing all these consistent real-world timelines is infinitely more valuable than the vague official guidance. What's particularly encouraging is how reliable the TC 571 → TC 846 progression seems to be based on everyone's shared experiences. The pattern is remarkably consistent across different cycle codes and time periods, which gives me confidence that this really is just a waiting game at this point. My cycle code is 20241419, so I'm still figuring out my optimal checking schedule. Based on what others have shared about being strategic rather than obsessively refreshing, I'm going to try to focus on specific days rather than constant monitoring. I'll definitely report back with my timeline once the 846 code appears to add another data point to this incredibly valuable community resource. Thank you to everyone who has shared their experiences - you've transformed what felt like a stressful unknown into a manageable process with clear expectations. This thread should be required reading for anyone dealing with TC 571 codes!

I'm currently dealing with TC 571 that appeared on my transcript March 21st, and this thread has been absolutely incredible for understanding what to expect! Like everyone else, I got the standard "wait for system updates" response when I called the IRS, which was so frustrating until I found this community discussion. What strikes me most is how consistent the 8-14 day timeline has been across all the different experiences shared here. Reading through everyone's real-world data has completely changed my perspective - instead of panicking about the unknown, I now feel like I have realistic expectations based on actual patterns from people who've been through this exact process. My cycle code is 20241521, so I'm still figuring out my processing schedule, but the strategic checking approach that several people mentioned makes so much more sense than the obsessive daily refreshing I was doing initially. The anxiety of not knowing is definitely worse than just knowing you need to wait approximately 10 days! This community has essentially created the timeline guidance that should be standard IRS information but isn't. The fact that we're all crowdsourcing this data to help each other navigate what should be straightforward communication is both frustrating and amazing. I'll absolutely update with my timeline once the 846 code appears - contributing to this valuable resource feels like the least I can do after how helpful everyone's shared experiences have been. Thank you to everyone who has documented their journey through this process!

4 I think an important factor nobody's mentioned is FUTURE plans for the app. If you intend to keep developing it, adding features, or creating more apps, the IRS would likely see this as an ongoing business activity rather than a hobby. One advantage of filing as self-employed now is that it establishes a pattern if your app income increases in the future. It's easier to start as self-employed and stay consistent than to switch from hobby to self-employed when profits increase.

I'm dealing with a similar situation with my freelance graphic design work that I do occasionally on weekends. Based on everything I've read here and my own research, it really seems like the profit motive test is key. The fact that you deliberately switched your app from free to paid shows clear intent to generate profit, even if the amount is small. That's probably the strongest indicator that this should be treated as self-employment rather than a hobby. I'd also consider what you plan to do going forward. Are you going to keep the app paid? Might you develop other apps? Even small actions like adjusting pricing or promoting the app could further demonstrate business intent. The expense deduction issue is huge too. Losing the ability to deduct that $125 developer fee means you're essentially paying taxes on income you didn't actually receive after expenses. That seems fundamentally unfair and not what the tax code is designed to do. I think I'm leaning toward Schedule C for my own situation after reading all these responses. Better to establish the pattern now while everything is well-documented and straightforward.

One thing nobody's mentioned yet about HSAs: if you're trying to decide whether to reimburse yourself now or let the money grow, consider your current tax bracket vs future bracket. If you expect to be in a higher tax bracket in retirement (which might happen with required minimum distributions from traditional accounts), it might make more sense to reimburse yourself now and use that money for expenses, rather than pulling more from taxable accounts. Conversely, if you're in your peak earning years now, letting that HSA money grow and reimbursing yourself in retirement could be smartest. Either way, KEEP YOUR RECEIPTS. Can't stress this enough. Digital copies with cloud backup.

Don't overthink the reimburse-then-contribute strategy. Simplest way to look at it: 1. You have a yearly HSA contribution limit ($3,850 individual/$7,750 family for 2023) 2. If you're not already maxing out your contributions, just contribute more without the reimbursement step 3. If you ARE maxing out, then there's no additional tax advantage to the reimburse-then-contribute cycle The real magic of HSAs is the option to pay expenses out-of-pocket now and reimburse yourself years later. I've been doing this for 6 years and have about $14k in "banked" medical expenses I can withdraw tax-free whenever I want, while my actual HSA has grown to over $45k.

This has been such a helpful discussion to read through! I'm in a very similar situation with my daughter who dropped from 12 to 10 credits mid-semester, and all the advice here has really put my mind at ease. One thing I wanted to mention that might help others - I found it useful to keep a simple spreadsheet tracking all the support I provide throughout the year (tuition payments, room & board, textbooks, health insurance, etc.). It makes it much easier to demonstrate that I'm providing more than half her support if anyone ever questions the dependent claim. Also, after reading about the importance of documentation, I'm definitely going to request that enrollment verification letter from the registrar's office showing her full-time status at the beginning of the semester. Better to have it and not need it than need it and not have it! Thanks to everyone who shared their experiences and especially to the tax professional who clarified the 5-month student requirement. This community is so valuable for navigating these confusing tax situations!

I'm a newcomer to this community but have been lurking and reading through all these responses - what an incredibly helpful discussion! I'm actually dealing with almost the exact same situation with my son who started fall semester with 13 credits but had to drop a class due to a scheduling conflict, bringing him down to 10 credits. Reading through everyone's experiences and especially the tax professional's explanation about the 5-month student requirement has been so reassuring. I was really worried I'd mess up his dependent status, but it sounds like as long as he was enrolled as a full-time student at the beginning of the semester and meets that 5-month enrollment test (which he definitely does), I should be fine to claim him. I'm definitely going to follow the advice about getting an enrollment verification letter from the registrar showing his initial full-time status. And that spreadsheet idea for tracking support expenses throughout the year is genius - I'm starting that immediately for next year! Thank you all for sharing your experiences so openly. This community seems like such a valuable resource for navigating these confusing tax situations. It's so much better getting real-world advice from people who've actually been through this than trying to interpret IRS publications on your own!