Doesn't the IRS get suspicious when they see really young kids getting paid? My accountant warned me that paying anyone under 7 would be a red flag.

The age itself isn't necessarily the red flag - it's whether the arrangement seems legitimate and reasonable. Many child actors and models are extremely young. The key is that you're paying for something with clear business value (the right to use their images in your marketing) and documenting the business purpose. Your accountant is right to be cautious though. The IRS does scrutinize family employment arrangements. That's why documentation is crucial - you need contracts, proof the images are actually used in your business, and evidence that the compensation is reasonable compared to market rates. Start modest with the amounts and keep everything professional and well-documented.

This sounds more legitimate than just "buying image rights." Have you ever been audited on this? I'm worried about getting flagged.

How did you find your accountant? Did you just google local CPAs or was there a better way to find someone who specializes in working with anxious clients?

Are these easy to buy? Do you just get them through a regular brokerage account or is there some special process? Always been confused about bonds in general.

You can buy municipal bonds through most regular brokerage accounts like Fidelity, Vanguard, Charles Schwab, etc. No special process needed. Many people find it easier to invest in municipal bond funds rather than individual bonds - they provide diversification and are more liquid. Just be aware that while the interest is tax-exempt, if you sell the bonds before maturity at a profit, you may owe capital gains tax on that profit. Also, some municipal bond interest can trigger the Alternative Minimum Tax (AMT) if you're subject to it, so look for bonds specifically labeled as "AMT-free" if that's a concern for you.

I bought some last year! Really easy through TreasuryDirect.gov though their website looks like it's from 1997 lol. You can put in up to $10k per person per year. The interest rate adjusts with inflation every 6 months. Definitely a good place to park some money that's safe from both market fluctuations AND taxes.

Thanks for this guidance. Do you happen to know which tax software handles ITIN applications most efficiently? And approximately how long should we expect for the ITIN processing?

All the major tax software programs (TurboTax, H&R Block, TaxSlayer) can handle ITIN applications equally well. They each have guided interviews that walk you through the W-7 form and explain what supporting documents you need. As for processing time, unfortunately, it's quite lengthy right now. Initial ITIN applications are taking about 7-11 weeks according to the IRS, but in practice, it can sometimes take 3-4 months, especially during peak tax season. The good news is that you can still file your return while the ITIN application is processing - you just won't receive certain credits until the ITIN is issued.

This is so true! I used TaxAct last year on an L1 visa and it asked the right questions to determine I was a resident alien for tax purposes based on the substantial presence test. Made a huge difference in available deductions.

Thanks for the suggestion! I haven't sold any extended warranties that I know of, but I did have a couple customers who got gap insurance. Do you know how long that cancellation window typically is? And would they typically tell me if a customer cancelled, or does it just show up as a deduction?

The cancellation window varies by product and state, but typically ranges from 30-90 days for most F&I products like gap insurance. Some states allow cancellations up to a year in certain circumstances. Unfortunately, most dealerships don't proactively inform salespeople about cancellations. The F&I department processes the cancellation, accounting adjusts the commission structure, and payroll just applies the deduction. It's a terrible system that leaves salespeople confused. This is definitely something to ask your finance manager about - they should be able to link that specific deduction to a customer's canceled product.

I second this! My dealer takes $25 out every time we get a low survey score from a customer. Shows up as "customer satisfaction adjustment" tho. Ask your sales manager for real.