I'm also dealing with a similar situation with my freelance music production work! Been making around $200-400 monthly from beats and mixing services, mostly through PayPal and CashApp, and completely ignored the tax implications until now. This thread has been incredibly valuable - especially learning about the CSV export feature for tracking payments. I had no idea that was even possible and was dreading having to manually go through years of transactions. One thing I wanted to add that might help others: if you're using multiple payment platforms like I am (PayPal, Venmo, CashApp), make sure to export from ALL of them when you're reconstructing your income records. I almost forgot about some smaller payments that came through CashApp and that could have caused issues if the IRS ever cross-referenced payment platform data. Also, for anyone doing music production or audio work, don't forget you can deduct software like Pro Tools, Ableton Live, plugin purchases, studio monitors, audio interfaces, and even soundproofing materials if you have a dedicated workspace. These expenses can really add up and significantly reduce what you'll owe. The peace of mind aspect that everyone's mentioned is so real. I've been losing sleep over this for weeks, but seeing all these success stories has me feeling much more confident about tackling those amended returns. Thanks everyone for sharing - this community is amazing!

I'm jumping in here as someone who went through almost this exact situation with my freelance writing work! Made around $100-250 monthly for about 2 years before realizing I needed to report it as income. The relief I felt after getting everything sorted out was incredible. Here's what worked for me: I used the CSV export from Venmo (didn't know this existed until someone mentioned it!) and cross-referenced it with my email confirmations from clients. Filed amended returns for the past two years using TurboTax's self-employment section - it really does walk you through everything step by step. Total back taxes ended up being around $520 including interest, but zero penalties since I was voluntarily correcting it. The IRS processed everything within about 10 weeks without any follow-up questions. One thing that really helped was setting up a simple spreadsheet going forward: Date | Client | Service | Amount | Payment Method. Takes 30 seconds to update after each payment but saves hours during tax season. Don't let the fear paralyze you - this is way more common than you think, and the IRS is surprisingly reasonable when you're being proactive about compliance. You've got this!

Great question! As others have mentioned, S corps are pass-through entities, so the corporation itself doesn't pay federal income tax on profits. However, you'll still need to make quarterly estimated tax payments on your personal return (Form 1040-ES) based on your expected income from the S corp. One thing to keep in mind is that if you're actively working in the business, you're required to pay yourself a reasonable salary through payroll. This salary is subject to payroll taxes (Social Security and Medicare), and you'll need to make regular payroll tax deposits. The remaining profits can then be distributed to you as distributions, which aren't subject to payroll taxes but are still taxable income on your personal return. Also don't forget that your S corp still needs to file Form 1120-S annually by March 15th, even though it doesn't pay federal income tax. This generates your Schedule K-1, which you'll need for your personal tax return. Since this is your first year with an S corp, I'd recommend working with a tax professional to make sure you're handling the reasonable salary requirement correctly - the IRS scrutinizes this closely.

One thing that caught me off guard my first year was the self-employment tax savings aspect of S corps. Unlike sole proprietorships where you pay self-employment tax on all business income, with an S corp you only pay payroll taxes (Social Security/Medicare) on your salary, not on distributions. This can result in significant tax savings, but only if you're paying yourself that "reasonable salary" everyone's mentioned. For quarterly estimated taxes, I use Form 1040-ES and base my payments on my expected total income for the year - both the salary from my S corp and the anticipated distributions. Don't forget to account for any tax withholdings from your S corp salary when calculating how much you need to pay in estimates. Also, since you mentioned this is your first year, make sure you understand the different deadlines: your S corp payroll tax deposits (if you have employees), quarterly personal estimated taxes (4/15, 6/15, 9/15, 1/15), and the annual S corp return (Form 1120-S due 3/15). It can feel overwhelming at first, but once you get into the rhythm it becomes much more manageable!

Has anyone looked into earning the Enrolled Agent (EA) certification? I've heard it might help bridge the gap for auditors wanting to transition to tax, but not sure if it's worth the investment of time and money.

I made a similar transition from audit to tax prep about 18 months ago, and I can tell you that your CPA license is already a huge advantage that many career changers don't have. Here's what worked for me: Start networking NOW through your local CPA society chapter. Many chapters have tax committees or special interest groups where you can meet tax professionals and learn about opportunities. I attended a few tax update seminars and made connections that led directly to interviews. Also consider reaching out to your current firm's tax department if they have one - internal transfers are often easier than external job searches, and they already know your work quality. Even if your firm doesn't do tax prep, partners often have connections at other firms. For the experience gap, emphasize transferable skills in your interviews: analytical thinking, client service (if you had any client interaction in audit), attention to detail, and understanding of accounting principles. These matter more than you think, especially to smaller firms that can train the technical tax stuff. One last tip - don't overlook payroll companies or bookkeeping firms that also do tax prep. They're often more flexible about hiring people without direct tax experience and can be a great stepping stone.

Has anyone actually tried getting their transcripts directly from the IRS website recently? I keep reading horror stories about identity verification problems.

I went through this exact same situation about 6 months ago when I was refinancing my home! Here's what worked for me: First, definitely try logging into your TurboTax account - they keep copies of your returns for several years and you can download them immediately as PDFs. Since you used them for the last 3 years, this should cover your 2022 and 2023 returns that your lender specifically requested. For the older H&R Block returns, if you filed at a physical location, definitely call them first before going the IRS route. When I called my local H&R Block office, they were able to email me copies of my 2019 and 2020 returns the same day for $25 each. If those options don't work out, the IRS transcript route that others mentioned is solid. I had to do this for one year where my tax preparer had gone out of business. The online system worked fine for me, but if you run into ID verification issues, you can always request by mail using Form 4506-T - it's free and took about 2 weeks when I did it. Pro tip: Call your mortgage lender and explain the situation. Many will accept tax transcripts instead of full returns, and some will even give you a short extension on document deadlines if you can show you've already requested the transcripts. Good luck with your closing!

Has anyone actually calculated what this refund would be? I'm in a similar boat.

This is really helpful info! I was in a similar situation last year and want to add a few things based on my experience. First, make sure all 3 of your kids will qualify as "qualifying children" for the Child Tax Credit - they need to be under 17 at the end of the tax year and meet the relationship/support tests. Sounds like yours will qualify no problem. One thing to watch out for - the American Opportunity Credit has income limits too. For married filing jointly, it starts phasing out around $160,000, so you should get the full benefit at $65k income. Also, don't stress too much about the calculator differences. I found that some online calculators don't account for all the interactions between different credits, or they use different assumptions about your filing status or deduction amounts. The rough calculation that Natalie provided above looks pretty reasonable to me. With no withholding, you're essentially getting an interest-free loan from the government through these refundable credits. Just make sure you file on time to get your refund processed quickly!