Did you get your full refund eventually? And did they contact you during those 3 months or was it just radio silence while they were verifying?

Yes, I did get my full refund including the excess Social Security tax amount. They didn't adjust anything once they verified my information. During those 3 months, it was mostly radio silence. I kept checking the "Where's My Refund" tool, and it just said "Your refund is being processed" the entire time. I called once after about 2 months and was told it was in the verification department and I just needed to wait. Then one day the status suddenly changed to approved, and I got the deposit a few days later.

Thanks so much for this! I just checked my tax software and found the Schedule 3 section. You're right - there's a specific line for "Excess social security tax withheld" and it was really straightforward to enter. I was definitely overthinking this. After entering the information, my refund increased by the exact amount of my excess withholding. No need for Form 843 or contacting employers at all!

Just to add - make sure you keep good records showing your calculation of the excess amount. A friend of mine got audited for this (bad luck I guess) and needed to show how she calculated the excess amount from her multiple W-2s.

That's a really good point, I didn't even think about the company deducting it on their end. I'll definitely tell him to keep all the settlement paperwork and document everything. Would you recommend he send in any specific documentation with his tax return, or just keep it all on hand in case of questions?

I wouldn't send any extra documentation with the return itself. The IRS doesn't want that unless they specifically ask for it. Just have him keep all the settlement documents, correspondence, and proof of the payment amount in a safe place for at least 7 years (the extended audit timeline). Also, when he reports it on Schedule 1, Line 8z, he should write a brief description like "Breach of contract settlement" next to it. That shows transparency and makes it clear he's not trying to hide anything.

Sometimes companies refuse to issue 1099s for settlements because they don't want to admit liability. I had this happen and my accountant said to just report it anyway. The IRS cares more that YOU report income than whether THEY issued the proper form.

Thanks for bringing this up! I definitely need the money sooner rather than later. Quick question - do you know if GLACIER tax prep software is good for this situation or should I just try to file directly?

GLACIER is actually quite good for international student tax situations. Many universities provide it free to their international students. It's specifically designed for nonresident tax filing and handles the special forms and tax treaty provisions that apply to international students. If your university doesn't provide free access, you could also look into using the IRS Free File program or one of the commercial tax software options with specific international student support. The key is making sure whatever you use can properly handle Form 1040-NR and any required attachments like Form 8843.

This is super important! I'm from the UK and because of the tax treaty, I was able to exclude some of my research stipend from being taxed. Saved me over $1200. The tax treaty articles are different for each country.

How did you find a specialist who knew both business exits and real estate? I'm in a similar situation but everyone I talk to seems to know one area well but not both. Did you use a Big 4 firm or a boutique?

I actually avoided Big 4 firms after interviewing two of them. Found our specialist through a real estate investment group I belong to - several members had used this boutique firm that specifically focuses on business owners with significant real estate portfolios. The key was finding someone who understood the intersection of business exit planning and real estate optimization - not just someone who happened to work with both separately. I'd recommend asking for specific examples of cases where they've handled both aspects together, not just checking boxes for experience in each area.

TaxPro Premier worked decent for me last year with RSUs and options, but completely failed with my private equity investments. I ended up having to use a combination of software for initial organization and then an actual CPA to review everything. Paid more in the end but avoided some serious mistakes the software made with my cost basis calculations.

It has my SSN on it! That's why I'm so confused and worried. It specifically mentions the "employer's share" but it's addressed to me personally with my social security number. I've worked for this company for 5 years but I'm just a regular employee - not a manager, not an owner, nothing. I just do construction work.

That's definitely concerning that it has your SSN on it. This suggests either a serious IRS error or potentially something more problematic is happening with your employer. Here's what I recommend: 1) Call the IRS using the number on the letter and explain you're just a regular employee with no financial authority, 2) Request a copy of any tax filings that listed you as responsible for the company's taxes, and 3) Document everything including the person you speak with. There's a small possibility your employer may have listed you as an officer or responsible person without your knowledge, which would be very problematic. Don't ignore this - addressing it promptly is important.

I did do some side jobs on weekends during 2020-2021, but I didn't think it was enough to matter. Maybe like $5,300 total across both years. I reported it on my taxes but I didn't know anything about deferring Social Security taxes - I definitely never consciously chose to defer any taxes!

This is probably it. If you reported self-employment income on Schedule C during 2020, you were eligible to defer the employer portion of self-employment taxes under the CARES Act. Some tax software automatically applied this deferral as a benefit without making it super clear to users. The deferred amounts were due in two payments - 50% by December 31, 2021, and the remaining 50% by December 31, 2022. If you didn't make those payments, that would explain the letter you're getting now.