Week 5 here and honestly this community has been more helpful than the IRS website itself 😭 @Ryan Andre thanks for the Tuesday/Thursday info - that's literally the first concrete timeline I've heard anywhere. Going to try that taxr.ai thing @Lauren Zeb mentioned because the "where's my refund" tool has been useless. At least now I know I'm not alone in this waiting game!

Week 2 of test batch here and honestly feeling way better after reading this thread! @Ryan Andre that Tuesday/Thursday processing schedule is incredibly helpful - finally have actual dates to work with instead of just refreshing constantly. @Charlotte White your success story after 6 weeks gives me hope! Going to definitely check out that taxr.ai tool @Lauren Zeb mentioned since the regular WMR has been completely useless. Thanks everyone for sharing your experiences - makes this whole waiting process feel less isolating when you know others are going through the exact same thing 🙏

I'm dealing with almost the exact same situation right now! My husband just got approved for SSDI after 3 years on private LTD, and we're facing that massive lump sum with most of it going back to the insurance company. One thing I wanted to add that hasn't been mentioned yet - make sure you understand the timing of when you need to report this. Since SSDI backpay can cover multiple tax years, you might be able to use the "lump sum election" under Section 86(e) to calculate the tax as if you had received the payments in the years they were actually for, rather than all in the year you received them. This could potentially lower your overall tax burden, especially if it pushes you into higher tax brackets. You'd use Form SSA-1099 along with Form 1040 and possibly need to file amended returns for prior years. It's complex, but could save you significant money if the backpay covers multiple years and would have been taxed at lower rates if received when originally due. Definitely recommend getting professional help for this - the interaction between SSDI taxation, subrogation payments, and lump sum elections is not something most general tax preparers are familiar with.

Great question about Section 86(e) and how it interacts with subrogation payments! You're right to think about the complexity this adds. When using the lump sum election, you would typically need to allocate both the income and the related deduction proportionally across the years the backpay covers. So if your SSDI backpay covered 3 years, you'd split both the SSDI income and the subrogation repayment deduction across those same years in proportion to the benefits that were supposed to be paid in each year. However, there's some debate among tax professionals about whether the repayment should be allocated proportionally or taken entirely in the year of actual repayment under Section 1341. The IRS hasn't provided completely clear guidance on this specific interaction. Regarding amended returns - the lump sum election typically requires you to calculate the tax both ways (as if received when due vs. all in current year) and take whichever results in less tax. You usually don't need to actually file amended returns for prior years - instead, you include the calculation on your current year return showing the tax that would have been owed if the payments were received in their proper years. This approach can definitely save money if the backpay would have been taxed at lower rates in prior years, but given the complexity with the subrogation issue, I'd strongly recommend working with a CPA who specializes in disability taxation to ensure you're handling both provisions correctly.

This is a really common issue that a lot of workers face, and you're absolutely right to be concerned. Based on what you've described - fixed schedule, using company equipment, boss controlling your work methods - you're clearly being treated as an employee but classified as a contractor for tax purposes. The financial impact is significant. At your $49,400 annual income, you're paying roughly $3,780 extra per year in self-employment taxes (the full 15.3% instead of just the employee portion of 7.65%). That's money your employer should be contributing. Here's what I'd recommend: Start by documenting everything about your work arrangement - your set hours, the equipment you use, how your boss directs your work, any company meetings you attend, etc. This documentation will be crucial whether you talk to your employer first or need to escalate to the IRS. Consider approaching your employer first with a non-confrontational conversation. Frame it as wanting to ensure you're both properly protected rather than accusing them of wrongdoing. Many employers, especially smaller ones, genuinely don't understand the classification rules. If that doesn't work, you can file Form SS-8 with the IRS to get an official determination of your worker status. You might also look into Form 8919, which allows you to pay only the employee portion of FICA taxes when you believe you've been misclassified. Don't stress too much about getting in trouble - the IRS goes after employers for misclassification, not employees. You're the victim here, not the perpetrator.

I've been following this discussion and wanted to share some additional perspective as someone who's dealt with employment classification issues professionally. What you're experiencing is unfortunately very common, especially in smaller businesses. The key thing to understand is that worker classification isn't based on what forms you fill out - it's based on the actual working relationship. The IRS looks at three main categories: behavioral control (how you do the work), financial control (business aspects of the work), and the relationship itself. From your description, you clearly fall into employee territory. Set hours, company equipment, direct supervision of work methods - these are textbook employee characteristics. Your employer having you fill out a W-9 doesn't magically make you a contractor. Beyond the immediate tax burden you're facing (which others have correctly calculated), consider the other protections you're missing: no unemployment insurance if you lose your job, no workers' compensation if you're injured at work, and no employer contribution to Social Security credits toward your future benefits. I'd strongly recommend the documentation approach others have mentioned, but also consider reaching out to your state's Department of Labor. Many states have worker misclassification task forces that can provide guidance and sometimes resolve these issues faster than going through federal channels. The most important thing is don't let this situation continue indefinitely. The longer it goes on, the more money you're losing to unnecessary taxes.

Anyone know if there's a penalty for not reporting this in previous years? I've been working in Brazil for 5 years and never included my FGTS in my FBAR calculations... 😬

This is really helpful information! I'm in a similar situation as an expat in Germany with mandatory pension contributions. Based on what everyone's saying, it sounds like the key principle is that if you have a "financial interest" in an account outside the US, it counts toward FBAR reporting regardless of withdrawal restrictions. One thing I'd add for the original poster - make sure you're using the correct exchange rates when converting your Brazilian real amounts to USD for reporting. The IRS has specific guidance on which exchange rates to use (generally the Treasury's year-end rates for the maximum balance calculation). Also, keep good records of your monthly FGTS statements throughout the year so you can accurately determine the maximum balance. Since employers deposit 8% monthly, your balance is constantly growing, so the maximum will likely be at year-end unless there were any withdrawals. Good luck with your filing!

Just be aware that if you don't report this income and somehow get audited, you'll face penalties and interest on top of the taxes you should have paid. The fact that PayPal doesn't report "friends and family" transfers doesn't protect you - it's still your legal obligation to report ALL income. I learned this the hard way with my Discord server donations. Started small but grew to about $400/month. Never reported it because "PayPal doesn't report it" - ended up with a nasty surprise when I got flagged for an audit for unrelated reasons and they found the unreported income.

This is really helpful information everyone! I'm in a similar situation with my Rust server where I collect donations through various platforms. One thing I want to add that might be useful - even if you decide to treat this as hobby income rather than business income, you still need to keep detailed records of all your expenses. I learned from my accountant that the IRS can be pretty strict about what counts as legitimate expenses, especially for gaming-related activities. Make sure you're tracking things like server hosting costs, domain registration, any software licenses, and potentially even a portion of your internet bill if you can demonstrate it's used substantially for the server. The key is being able to show that these expenses are directly related to generating the income, not just general gaming expenses. Keep receipts and document everything - it'll save you headaches later whether you file as hobby or business income.