This thread has been incredibly helpful! I'm dealing with a very similar situation - just received a 1099 for my FCRA settlement that includes the attorney fees I never actually received. One question I haven't seen addressed: does the timing of when you actually received the settlement money versus when the 1099 was issued matter for tax purposes? My settlement was finalized and paid in December 2024, but I just got the 1099 now in January 2025. Should I be reporting this on my 2024 taxes or 2025 taxes? Also, for those who mentioned the above-the-line deduction on Schedule 1 - is there a specific line number where this gets reported? I want to make sure I'm putting it in the right place when I file. My settlement was about $15,000 total with $6,000 going to attorney fees, so getting this deduction right is pretty important for my tax liability. Thanks to everyone who shared their experiences - it's really reassuring to know I'm not the only one dealing with this confusing situation!

Just wanted to add another perspective as someone who went through this exact situation with an FCRA settlement last year. The whole 1099 including attorney fees thing is incredibly frustrating and confusing at first, but everyone here is giving solid advice about the above-the-line deduction. One thing I'd emphasize is to make sure your tax preparer actually knows about IRC 62(a)(20) and how it applies to FCRA cases. I went to H&R Block initially and the person there had never heard of this deduction and almost filed my return without it. I ended up going to a CPA who specialized in more complex tax situations, and it made all the difference. Also, keep a copy of your settlement agreement that clearly states it was for FCRA violations. The IRS may want to verify that your case actually qualifies for the unlawful discrimination treatment. In my case, the settlement agreement specifically mentioned the Fair Credit Reporting Act, which made it clear-cut. The good news is once you get it filed correctly, you really are only taxed on what you actually received, not the full settlement amount. It's just a matter of making sure the deduction is taken in the right place on your return.

Quick tip for everyone making estimated tax payments - ALWAYS print or save the confirmation page when scheduling payments through EFTPS or Direct Pay! I schedule all my quarterlies at once too, and I've caught mistakes twice before they happened because I reviewed my confirmation details. Also, check your IRS account online every quarter to make sure payments are being applied to the correct year. Much easier to fix these issues early rather than discovering them at tax time!

This is exactly why I always double-check my estimated tax payments immediately after scheduling them! I've seen this happen to several people, and you're handling it perfectly. The key thing to remember is that the IRS systems are actually quite good at detecting these cross-year payment misallocations. Since Where's My Refund is showing the adjusted amount, that's confirmation the IRS has already corrected the issue on their end. You definitely don't need to file an amended return - that would just complicate things unnecessarily and potentially delay your refund. Your plan to treat the misapplied January payment as your first 2025 estimated payment is spot on. Just make sure to adjust your remaining quarterly payments accordingly so you don't overpay for 2025. The IRS won't care that your "first quarter" payment was technically made in January instead of April - they just look at the total amount credited to each tax year. Keep those confirmation screenshots from WMR and your payment records for your files, but otherwise you should be all set!

One thing to consider - the excise tax is only $2.10 (6% of $35), which is less than the $25 processing fee for withdrawing the excess. Financially, you made the right call. If I were you, I would: 1. Answer "No" to FreeTaxUSA's question about withdrawing the excess 2. Make sure Form 5329 is included with your return (the software should handle this) 3. Pay the small excise tax now 4. Keep documentation from your HSA custodian showing the recharacterization 5. When filing next year, be aware that your 2025 contribution limit effectively includes this $35 The most important thing is proper documentation. As long as you have proof of what happened and report it accurately, you'll be fine!

Great advice from everyone here! I just want to add one more thing that might help - when you're dealing with HSA overcontributions in the future, timing really matters. If you catch the error before your tax filing deadline (including extensions), you can withdraw the excess contribution AND any earnings on it without penalty. But once you file your return, you're locked into either paying the 6% excise tax or dealing with more complex correction procedures. For your current situation, you've already made the right choice given the circumstances. The $2.10 excise tax is definitely better than the $25 processing fee, and you avoided the hassle of dealing with earnings calculations. Just make sure to adjust your HSA contributions for 2025 to account for that $35 that's being applied to next year's limit!

This has been an incredibly informative thread! I'm dealing with almost the exact same situation - about $3,200 in winnings from Underdog and PrizePicks over the past 10 months, and I was completely clueless about the tax implications until I found this discussion. After reading through everyone's experiences, I've learned so much that I wish I'd known earlier. The key takeaways for me are: 1) All winnings are taxable gambling income regardless of receiving tax forms, 2) I need to report everything on Schedule 1, 3) Losses can only be deducted if I itemize (which probably doesn't make sense given the standard deduction), and 4) I should start setting aside 25-30% of future winnings for taxes. I just downloaded my transaction histories from both platforms using the navigation tips shared here - found them under Account Settings for PrizePicks and Account > History > Transactions for Underdog. The CSV exports show everything I need and confirm my net winnings figure. Planning to implement that Google Sheets tracking system immediately and set up automatic transfers to a separate tax account going forward. Based on my $3,200 in winnings, I'm looking at owing around $800-960 in taxes, so I definitely need to get organized for next year's quarterly payments to avoid underpayment penalties. Thanks to everyone who shared their real-world experiences - this community knowledge is far more practical than anything I could find through official channels. This thread probably saved me from making some costly filing mistakes!

This thread has been incredibly helpful for understanding DFS tax obligations! I'm in a very similar situation with about $2,800 in winnings from Underdog and PrizePicks, and I was completely lost until I found this discussion. One thing I wanted to add that I discovered while going through my records - make sure to check if your platforms have any "bonus" or "promotional" winnings that might be treated differently. I noticed that some of my early wins came from deposit match bonuses, and I wasn't sure if those counted as gambling winnings or something else entirely. After digging into it, I learned that any cash bonuses that become withdrawable are still considered gambling income for tax purposes, even if they originated from promotional offers. So those need to be included in your total winnings calculation just like regular contest wins. Also want to echo what others have said about the Google Sheets tracking system - I just set one up based on the suggestions here and it's already helping me organize everything much better. Having all the data in one place makes the tax situation feel way more manageable. Planning to download my transaction histories this weekend and implement the 30% automatic transfer rule going forward. Thanks to everyone who shared their experiences - this community knowledge has been invaluable!

I tried both TurboTax and FreeTaxUSA this year too! something I noticed that nobody mentioned is that TurboTax keeps your old returns accessible for years but FreeTaxUSA only gives you access to prior year returns if you pay for their deluxe version... found that out the hard way when I needed last years AGI and couldn't access my FreeTaxUSA return from last year 😭

Great comparison! I switched from TurboTax to FreeTaxUSA this year after getting hit with similar upgrade fees. One thing that really helped me was keeping a simple spreadsheet throughout the year tracking my tax-relevant expenses and income sources. When tax season came around, I had everything organized which made the manual entry in FreeTaxUSA actually faster than waiting for TurboTax's imports to work properly. The $90 savings you mentioned is no joke - that's real money! I ended up using those savings toward my emergency fund. For anyone still on the fence, FreeTaxUSA also has a really helpful "tax calculator" feature that lets you estimate your refund before you even start entering information, which helped me feel more confident about switching from the "name brand" option. One small tip: FreeTaxUSA's customer support is actually pretty responsive if you run into issues. I had a question about reporting HSA distributions and got a helpful response within a few hours via their chat feature.