I'm a retired postal worker on FERS disability too. What I learned after years of confusion is that the "UNKNOWN" in box 2a is actually OPM's way of telling you that YOU need to calculate the taxable portion. The formula is: Gross Distribution (box 1) minus the amount of your contributions you recover this year. To figure out how much of your contributions you recover each year, divide your Total Employee Contributions (box 9a) by the number of expected monthly payments based on your age when payments started (from IRS Publication 575). For example, if your husband was 45 when payments started and has a survivor benefit, you'd use 410 as the number of expected payments. So you'd recover about $15.85 tax-free per month ($6,500 ÷ 410 = $15.85 × 12 months = $190.20 per year). So taxable amount would be $13,500 - $190.20 = $13,309.80 Hope this helps!

Dont overthink this. Calculate taxable amount as: Box 1 minus (Box 9a divided by life expectancy from IRS tables) I been doing this for 8 years on my federal disability. Your tax guy is making it more complicated then it is. The UNKNOWN is just OPM being lazy and making us do the math ourselves.

Something nobody's mentioned yet - if your gambling activity is substantial and consistent enough, you might actually qualify as a "professional gambler" for tax purposes, which changes how you report everything. Instead of putting winnings on Line 8b and losses on Schedule A (subject to the 2% floor), you'd report everything on Schedule C. The key factors the IRS looks at: whether you approach gambling in a businesslike manner, your expertise, time invested, expectation of profit, and history of income from gambling. From your detailed record-keeping, it sounds like you might qualify. Benefits: You can deduct all losses (not just when itemizing) and deduct related expenses (travel to casinos, internet for online play, etc). Downsides: You'll pay self-employment tax on net profits. I'm not saying this is definitely your situation, but worth discussing with your CPA given how organized you are with tracking everything.

I went through almost the exact same situation last year with multiple online casinos and PayPal 1099-Ks. The advice here is spot-on - you're definitely on the right track with your detailed record keeping. One thing that really helped me was creating a simple reconciliation statement that I attached to my return. I made three columns: "PayPal Transaction," "Transaction Type," and "Actual Gambling Income." For each 1099-K transaction, I noted whether it was a deposit (no income), withdrawal of original deposit (no income), or withdrawal of actual winnings (taxable income). This made it crystal clear to anyone reviewing my return that I wasn't trying to hide anything - I was just properly categorizing what was actual gambling income versus money movements. My CPA said having this level of documentation made him much more comfortable with how we reported everything. The double-counting concern you mentioned with W2-G forms is real, but your detailed logs will protect you. Just make sure when you report gambling winnings on Line 8b that you're not including the same win twice if it appears on both a W2-G and gets captured in your PayPal withdrawals. You're being more careful than most people in this situation, so I think you'll be fine as long as you keep documenting everything the way you have been.

Under IRC §32(m) and §24(e), as amended by the Protecting Americans from Tax Hikes Act of 2015 (P.L. 114-113, Div. Q), the IRS is prohibited from issuing refunds for tax returns claiming the EITC or ACTC before February 15th. This applies regardless of when you file - January 1st or February 14th, the earliest possible refund date remains the same. For business owners specifically, this typically only affects you if your business is a pass-through entity (Schedule C, S-Corp, Partnership) AND your personal income falls within EITC thresholds (for 2024: below $63,398 with three or more qualifying children, $59,478 with two children, $52,918 with one child, or $17,640 with no children). If your business is profitable enough to exceed these thresholds, PATH Act holds won't directly affect your refund timing.

I've been filing taxes for over 20 years, and I remember the pre-PATH days when early filers with EITC could get refunds by late January. One alternative approach I've seen work well: if you need your refund quickly and typically claim these credits, you could adjust your W-4 withholding throughout the year to be more accurate. This reduces your refund amount but puts more money in each paycheck. Then the PATH delay affects a smaller portion of your annual tax benefit. I've found this especially helpful for my clients who are small business owners who also have W-2 income from a side job or spouse.

Don't overlook the liability aspects too! Being a partner potentially exposes you to more business liability than being just an employee, depending on how the partnership is structured. If it's a general partnership interest, you could have unlimited personal liability for the business's debts and legal issues. If it's a limited partnership interest, your liability is usually capped at your investment. Since you mentioned it's an LLC, you should have some liability protection, but make sure to understand exactly what your partnership agreement says about this. Also check if the company maintains proper liability insurance for partners.

One aspect that hasn't been fully covered is the potential impact on your Social Security benefits calculation. As an employee, your employer pays half of your Social Security taxes, but as a partner, you'll pay the full 15.3% self-employment tax on your earnings (though you can deduct half of it). However, this actually means more of your income will count toward your Social Security earnings record, which could result in higher future Social Security benefits when you retire. Also, regarding the 401(k) loss - while you'll lose access to any employer matching, a Solo 401(k) as a partner can actually allow you to contribute both as the "employee" (up to $23,000 for 2024, or $30,500 if over 50) AND as the "employer" (up to 25% of compensation), potentially letting you save much more for retirement than a traditional employer plan. The key is running the numbers for your specific situation. The immediate tax changes might look concerning, but the long-term wealth-building potential of ownership, combined with the tax advantages available to business owners, often makes it worthwhile.

Quick tip: make sure you keep checking your transcript weekly. Sometimes they dont even send updates when they process stuff

I'm dealing with the exact same situation! Filed my amended return in November, got the 4883c letter in December, verified through id.me immediately, and still nothing on my transcripts. It's so frustrating because you do everything they ask and then just... wait indefinitely. At least we're not alone in this mess! 😤