One thing that helped me when I was starting out was understanding the concept of "realization" in tax law. The IRS only cares about transactions where you've actually realized a gain or loss - meaning money has changed hands. Just holding stocks that go up or down in value is like having a baseball card collection that becomes more valuable over time. You don't owe taxes on your baseball cards getting more expensive until you actually sell them to someone else. The same principle applies to your brokerage account. Your $10k paper gain is just that - on paper. Until you click "sell" and receive actual cash proceeds, it's not a taxable event. This is why people talk about "tax-loss harvesting" - strategically selling losing positions to offset gains, because you control when to realize those losses. Keep doing what you're doing - buy and hold is not only a solid investment strategy, but it's also very tax-efficient!

Just to add another perspective that might be helpful - I work as a tax preparer and see this confusion all the time with new investors. The key thing to remember is that the U.S. tax system is based on "realization," not "appreciation." Think of it this way: if you bought a house for $200k and it's now worth $300k, you don't pay taxes on that $100k increase until you actually sell the house. Stocks work exactly the same way. Your brokerage will automatically send you the appropriate tax forms when there's actually something to report. So if you only bought stocks in 2024 and didn't sell any, you won't receive a 1099-B for that tax year. When you do eventually sell in future years, that's when you'll get the 1099-B showing your proceeds, and that's when you'll report it on Schedule D. The only time you might need to think about taxes before selling is if you're doing strategic tax planning (like tax-loss harvesting near year-end), but that's an advanced strategy you don't need to worry about as a beginner. Keep good records of your purchases, but don't stress about reporting anything until you actually sell!

I worked as a waiter through college and ended up getting a letter from the IRS two years after not reporting like $3k in tips. Had to pay the back taxes plus interest. Not worth the stress tbh. Just report it all now.

Tyler, I totally get your concern about not wanting to cause problems, but you're actually in a really good spot here. Reporting your unreported tips is definitely the right move, and at your income level, it's very likely to work in your favor financially. Here's what you need to know: You'll use Form 4137 to report tips you didn't tell your employer about. This form calculates the Social Security and Medicare taxes you owe on those unreported tips. The good news is that with your $22k base pay, reporting additional tip income will probably increase your Earned Income Credit significantly, which could more than offset any additional taxes you owe. The IRS actually expects situations like yours - that's why Form 4137 exists. As long as you're being honest about your total tips and can reasonably document them (even rough daily notes work), you shouldn't have audit issues. Keep whatever records you have of your tips, even if it's just a notebook or phone notes. Don't worry about getting the restaurant in trouble either. You're taking responsibility for your own tax obligations, which is exactly what you should do. The restaurant has their own reporting requirements, but your personal tax return is separate from that. The amount does matter somewhat - $5.5k is definitely significant enough that you want to handle it properly, but it's not so large that it would automatically trigger problems if you report it correctly with Form 4137.

I completely understand your anxiety - waiting for a refund check when you really need the money is so stressful! I've been in this exact situation before and the waiting is honestly the worst part. From my experience and what I've learned from others here, 5 days since the mail date is still completely normal. The IRS uses standard USPS mail which typically takes 7-10 business days, and sometimes even longer depending on your location. What really helped ease my mind when I was waiting was understanding that the "mail date" on your transcript is when the IRS hands it over to USPS, not when it actually starts moving through the postal system - there can be a 2-3 day processing delay on USPS's end before it even begins transit. Since you're coming from a country with faster postal service, this probably feels much slower than what you're used to. I'd definitely recommend waiting until at least next Tuesday (after Memorial Day weekend) before getting concerned. Most people receive their checks within that 7-10 business day window. Also, definitely sign up for USPS Informed Delivery if you haven't already - it lets you see what mail is coming each day and really helps with the peace of mind!

I've been tracking IRS refund delivery times for years, and I can tell you that your situation is completely normal! The anxiety you're feeling is totally understandable, especially coming from a country with faster postal service. Here's what I've learned: The IRS uses standard USPS mail for refund checks, which typically takes 6-10 business days after the mail date on your transcript. Since your check was "mailed" on Friday (May 17th) and today is Wednesday (May 22nd), you're only at 3 business days - still well within the normal timeframe. What many people don't realize is that the "mail date" on your transcript is when the IRS processes it for mailing to USPS, not when it actually enters the postal system. There's often a 2-3 day processing delay before USPS even starts moving it. Add in the Memorial Day holiday this weekend, and you're looking at even more potential delays. My recommendation: wait until at least next Tuesday (May 28th) before contacting the IRS - that'll put you at about 7-8 business days, which is when most people receive theirs. In the meantime, sign up for USPS Informed Delivery to track what's coming to your mailbox daily. It really helps with the peace of mind! Your check is almost certainly on its way - US mail is just slower than what you're used to.

Don't forget about the Net Investment Income Tax (NIIT) of 3.8% that kicks in for higher incomes. So some people actually pay 23.8% not just 20% on their capital gains!

This is such a helpful thread! I'm dealing with a similar situation where I'm planning to sell some rental properties next year. One thing I haven't seen mentioned yet is the depreciation recapture rules - if you've been claiming depreciation on rental property, you'll owe tax at 25% on the depreciation amount you claimed, even if the rest of your gain qualifies for the lower capital gains rates. Also, for anyone considering the charitable donation strategy mentioned earlier, don't forget about donor-advised funds. You can make a large charitable contribution in one year to lower your AGI for capital gains purposes, but then distribute the funds to actual charities over several years. It gives you more flexibility while still getting the immediate tax benefit. The timing advice from Emma is spot-on too. I've been working with my CPA to spread out my property sales over 2-3 years to stay in lower tax brackets rather than selling everything at once and getting hit with the highest rates.

Dumb question maybe, but what exactly happens if the statute of limitations runs out while they're still auditing? Does the whole thing just go away magically, or can they still assess taxes based on what they found up to that point?

Based on your situation, I'd actually recommend signing the Form 872 with a negotiated timeframe. Here's why: since you've already provided all documentation and are planning to accept their findings anyway, giving them adequate time to complete a thorough review could work in your favor. When auditors feel rushed by an expiring statute, they often make conservative estimates that lean heavily toward the government's position. With more time, they might catch calculation errors in your favor or give more consideration to borderline deductions. Since you mentioned the proposed increase is $4,200, I'd suggest signing the extension but negotiating it down to 6 months instead of the typical 1-year extension. This gives them sufficient time while still keeping some urgency to wrap things up. You can literally cross out the date on Form 872 and write in your preferred end date - most examiners will accept reasonable modifications. The key is being proactive about it. Contact your examiner and say something like: "I'm willing to sign the extension to give you adequate time to complete a thorough review, but I'd prefer to limit it to 6 months to bring closure to this matter." This shows cooperation while maintaining some control over the timeline.