I've never heard of the Voluntary Disclosure Practice before. Is that different from the regular process of just filing late returns? Would I need to do anything special to qualify for that? For records, I have some bank statements showing cash deposits, and I've kept rough notes about my hours and pay rates over the years in various notebooks. Nothing official from the employer though. Would bank statements be enough to show the IRS what I earned?

The Voluntary Disclosure Practice is more formal than just filing late returns. It involves coming forward to the IRS before they discover the non-compliance, providing complete and truthful disclosure, and cooperating with the IRS to determine the correct tax liability. While it doesn't guarantee immunity from prosecution, historically it has significantly reduced the likelihood of criminal charges in cases of willful non-compliance. Your bank statements showing cash deposits will be extremely helpful. Combined with your notes about hours and pay rates, you actually have more documentation than many people in similar situations. The IRS understands that reconstructing income from years ago is difficult, especially with cash payments. They generally accept reasonable reconstructions based on the best available information. Make sure to be consistent and realistic with your income estimates - sudden unexplained variations might raise questions.

This is actually a really good point. I worked as a volunteer tax preparer, and many people don't realize that the EITC can result in substantial refunds for lower-income workers. If your annual income was under about $60,000 (varies by year and filing status), it's definitely worth looking into.

Thanks! Is there any difference feature-wise between the download version and online version if I go with Deluxe? Also, do you know if the download version includes a state filing or is that extra?

The download version and online version have essentially the same features for each tier, but the pricing structure is different. The download is a one-time purchase that you install on your computer, while the online version is a subscription service. Most people find the online version more convenient, but the download can be cheaper. State filing is almost always an additional cost regardless of which version you choose. The download versions typically charge around $40 per state, which is separate from the federal filing cost. Some retailers occasionally offer bundle deals that include one state filing, but that's not common - always check the packaging details to confirm what's included.

I would second this. Premier is only about $20-30 more than Deluxe and well worth it if you have investments. I've used it for years and the investment import feature works much better with Premier than with Deluxe.

Thanks for the tip! Guess I'll go with Premier to be safe. I do have some crypto I forgot to mention, plus stocks across three different platforms. Don't want to get stuck with upgrade fees at the end.

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.

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.

I've considered leasing, but I typically keep vehicles 5-6 years and put on high mileage (30K+ per year) managing rental properties across a wide area. Doesn't leasing usually end up more expensive with mileage penalties for heavy use like mine? I'm curious how you handle that with your rental business. Does the tax simplification outweigh the potential higher costs?

You're right that high mileage can make leasing less attractive. I typically negotiate high-mileage leases (25K miles/year) upfront, which increases the monthly payment but eliminates surprise penalties later. For my situation with 3 rental properties all within 50 miles, it works out financially. With your usage pattern and keeping vehicles 5-6 years, purchasing probably makes more financial sense despite the tax complications. The tax simplification doesn't outweigh the cost difference in your high-mileage scenario. If you're putting 30K+ miles annually while managing properties "across a wide area," the mileage penalties would likely erase any tax-related benefits from leasing.

I use Everlance and it's been awesome. Automatically tracks my trips to rental properties vs personal driving. At tax time, I just export a report showing my business percentage for the year. My accountant said this kind of documentation is exactly what you need if you ever get audited about vehicle expenses with varying business use.

Thanks for the recommendation! Does Everlance let you categorize trips to different properties separately? I need to track which trips go to which rental for our internal accounting, not just the overall business percentage. My current app only tracks business vs personal but doesn't let me sub-categorize the business trips.