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.

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.

Thanks for this advice! I do have all my trading records going back several years, but they're not organized very well. Do you have any tips on the best way to document the carryover trail? Should I be saving specific forms from each year?

You definitely want to save your full tax return from each year, especially Schedule D and Form 8949. These show your capital gains/losses calculations and carryover amounts. Just as important, keep a separate spreadsheet or document that tracks: 1) Your starting carryover amount each year, 2) How much was used to offset gains that year, 3) How much was used against ordinary income (max $3,000), and 4) The remaining carryover amount that moves to the next year. I also recommend keeping all your original trade confirmations and year-end statements from brokerages. In my audit, the IRS actually wanted to see the original transactions that created the losses in the first place, not just the tax forms showing the carryovers.

That's not accurate. The $3,000 limit ($1,500 if married filing separately) applies to the tax return, not per person. A married couple filing jointly still has the same $3,000 limit as a single filer. The $1,500 limit for married filing separately is because they're essentially splitting the $3,000 limit.

Ugh I didn't even think about my state taxes! Does the 3 year amendment window apply to state filings too or do they have different deadlines?

State deadlines vary, but most follow similar timeframes to the federal ones. However, many states require you to notify them of federal changes within a shorter window - sometimes as little as 60 or 90 days after you amend your federal return. I'd recommend checking your specific state's tax department website for their requirements. The important thing is to handle it proactively rather than waiting for them to catch it later, which could result in additional penalties.

I use QuickBooks Self-Employed and it connects to my bank account to automatically track income. Definitely worth the subscription fee for avoiding this exact situation!