That makes sense, thank you. If I file an amendment, will I likely get my refund delayed? I haven't received it yet and I'm a bit worried that filing an amendment might further complicate things.

Filing an amendment shouldn't affect your original refund - those are processed separately. Your original return will continue processing as normal, and you'll receive that refund based on the original timeline. The amendment is processed separately and typically takes longer (up to 16 weeks currently). Since your amendment won't change the total tax due (assuming the only change is moving the same amount from royalties to other income), you won't have any additional payment to make or receive. The amendment is just to correct the reporting location of the income.

If you use tax software, it's way easier. Just go back into whatever program you used, tell it you need to amend, and it will create all the right forms for you. TurboTax, H&R Block, and most others handle amendments pretty well.

This is what I'm afraid of! Do they really take that much of your paycheck? We'd be completely screwed if that happened. Do they give any warning before they start garnishing?

Yes, they can take up to 70-80% of your paycheck depending on your filing status and number of dependents. They do send multiple notices before taking action - usually at least 3-4 letters demanding payment or response. The problem is many people ignore these notices hoping they'll just go away, which only makes things worse. The garnishment itself comes with very little warning once they've sent all required notices. My cousin had received several letters over 6-8 months but ignored them all. Then suddenly his employer notified him that they received a garnishment order, and his next check was drastically reduced.

Exactly this. I work in construction too and my state's contractor licensing board suspended my license for unfiled state taxes. Lost my ability to legally work for 3 months while straightening it out. My advice - file back taxes even if you can't pay them all at once. The failure-to-file penalties are much worse than failure-to-pay.

We usually file ourselves using tax software. Do you think it's worth paying for a CPA just to get help with the IP PIN issue? I'm wondering if the cost would be worth it at this point.

It depends on your situation. If you have a relatively simple return that you're comfortable filing yourself, hiring a CPA just for the IP PIN might be overkill. The services others mentioned like taxr.ai or Claimyr would probably be more cost-effective in that case. However, if you have a more complex tax situation that might benefit from professional review anyway, this could be a good excuse to establish a relationship with a CPA. Many offer reasonable rates for basic returns, and the peace of mind plus PIN assistance might be worth it. Some also offer a free initial consultation where you could ask about their ability to help with the IP PIN specifically.

This is actually bad advice. Filing without your IP PIN when you've been issued one can cause serious problems. The whole point of the IP PIN program is to prevent identity theft, so the IRS will flag your return and it could trigger an audit or further identity verification steps.

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.

Is there something similar to 1031 exchanges but for stocks? Like if I wanted to sell my Amazon shares and buy Google instead, is there any way to defer the capital gains?

Unfortunately, there isn't a direct equivalent to 1031 exchanges for stocks. Those tax-deferred exchanges are specifically for real estate and certain types of personal property, but not securities like stocks or bonds. When you sell stocks, even if you immediately reinvest the money in different stocks, you'll generally have to pay capital gains tax on any profit. The closest option for stocks would be to do your investing within tax-advantaged accounts like IRAs or 401(k)s where you can buy and sell without triggering immediate tax consequences, but that doesn't help for investments you already hold in taxable accounts.

I've been doing this for my clients for years. The key is tracking specific tax lots meticulously and choosing which ones to sell based on your current year tax situation. Some brokerages make this easy with their cost basis settings (specific identification method instead of FIFO). Just make sure you're consistent with your approach.