Great question! Since you built the PC before starting your job, you can still potentially deduct the business portion, but there are some important things to keep in mind. First, you'll need to determine what percentage of time you use the computer for work versus gaming. If you're working part-time and also gaming regularly, you might be looking at something like 30-40% business use. Whatever percentage you claim, make sure you can document it with actual usage tracking. Since your PC cost $2,200, you'll likely need to depreciate it over 5 years rather than taking the full deduction at once. So if you determine 40% business use, that's $880 depreciated over 5 years, or about $176 per year. The depreciation would start from when you began using it for work (last week), not when you originally purchased it. This is called the "placed in service" date for business purposes. One important caveat: if you're a W-2 employee, the Tax Cuts and Jobs Act eliminated most unreimbursed employee expense deductions through 2025. These deductions are only available if you're self-employed or an independent contractor filing Schedule C. Before going the deduction route, I'd suggest checking with your employer about any home office stipends or equipment reimbursement programs - many companies offer these now for remote workers and it's often simpler than tax deductions!

A simple spreadsheet tracking daily work hours versus gaming hours would definitely be sufficient for IRS documentation purposes! You don't need anything fancy - just dates, work hours, and personal use hours. Even a basic log showing "worked 4 hours, gamed 3 hours" type entries will demonstrate your business use percentage over time. The key is consistency and reasonableness. If you track for a representative period (like a month or two) and establish a pattern, that's usually enough to support your claimed percentage. Just make sure your records match what you actually report on your taxes. Since you're just starting the job, this is actually perfect timing to begin tracking from day one. It'll give you clean documentation showing exactly when business use began and what your actual usage patterns are. Much easier than trying to recreate records after the fact! And definitely do ask about employer reimbursement programs. Even if they don't have a formal policy, many companies are willing to work something out for remote employees, especially if you present it professionally with documentation of what equipment you're using for work.

Has anyone tried just reporting the W-2 as-is but attaching an explanation letter? My tax guy suggested doing that instead of Form 4852 because he said it's less likely to trigger a review.

I'm dealing with a very similar situation right now! My employer's payroll company miscategorized my HSA contributions as taxable income instead of pre-tax deductions. It's so frustrating when these third-party payroll companies make errors and then take forever to fix them. Based on what I've learned from my own research and talking to a tax professional, I'd definitely recommend going with the Form 4852 option that others mentioned. It's the official IRS form designed exactly for this type of situation, and it gives you a paper trail showing you made a good faith effort to correct the error. One thing I'd add is to make sure you calculate the tax impact of the error before deciding how urgent this is. In your case, having health insurance and FSA contributions wrongly categorized as dependent care benefits could affect your eligibility for certain deductions or credits. The dependent care category has different tax treatment and limits, so it's definitely worth fixing rather than filing as-is. Also, don't feel bad about being the "squeaky wheel" with HR if this drags on much longer. April 15th isn't that far away, and you shouldn't have to file an extension because of their payroll company's mistake. Sometimes a little pressure is exactly what's needed to get these things resolved.

I've been following this discussion closely as I'm dealing with my own IRC 1341 situation. My former employer accidentally included me in a retention bonus payout in late 2022 even though I had already given notice and wasn't eligible. I had to repay $4,800 in 2023. Reading through everyone's experiences, I think I made some mistakes in my initial filing. I claimed the credit but didn't use the specific "claim of right" terminology that Chad mentioned, and my employer documentation just says "bonus repayment required" rather than clearly establishing it was paid in error. What really strikes me from this thread is how important the exact language seems to be with the IRS on this relatively uncommon credit. I'm planning to file an amended return using the specific terminology and documentation approach that several people have outlined. One thing I'm curious about - has anyone dealt with a situation where the original payment was a bonus rather than regular salary? I'm wondering if there are any special considerations for bonus repayments under IRC 1341, or if the same rules apply regardless of the type of compensation that was overpaid. Thanks to everyone for sharing such detailed experiences - it's incredibly helpful to see what actually works with the IRS rather than just the general guidance in the publications!

I've been dealing with a similar IRC 1341 situation and wanted to share what I've learned from working through it. My company accidentally continued my health insurance reimbursements for 4 months after I switched to my spouse's plan, totaling about $2,400 that I had to repay in 2024. What really helped me was following the documentation approach outlined in this thread. I made sure to get a letter from my employer's benefits department that specifically stated the reimbursements were "erroneously made under a claim of right" and that I "had no legal entitlement to receive these payments after changing coverage." The IRC 1341 calculation showed Method 2 would save me about $350 more than just taking a deduction, since I was in the 24% bracket when I received the payments but only 22% in the repayment year. One tip I'd add to what others have shared - if you're dealing with benefits overpayments rather than salary, make sure your employer documentation clearly references the specific policy that was violated. In my case, having the benefits administrator cite the exact section of our health plan that prohibited double coverage really helped establish that the original payments were made in error rather than just being a voluntary repayment. The IRS accepted my credit without additional questions when I used the specific terminology everyone here has recommended. This thread was incredibly valuable for understanding how to properly document and present an IRC 1341 claim!

This situation is definitely not normal, and your instincts are right to be concerned. As a W-2 employee, you should absolutely have access to your employer's EIN - it's required information for your tax filing. A few immediate steps I'd suggest: **First, determine your actual employment status.** If you're truly a W-2 employee, the EIN should be on your paystubs, and you should receive a W-2 by January 31st. The fact that it's missing from your paystubs and your employer is being evasive suggests you might actually be classified as a 1099 contractor, even if that wasn't made clear to you initially. **Document everything now.** Save all your paystubs, screenshot your direct deposits, and keep records of these conversations with your employer. If this turns into an IRS issue, you'll need proof of your employment and income. **Give them one final deadline.** Send a polite but firm email requesting your W-2 (if you're an employee) or 1099 (if you're a contractor) by the legal deadline of January 31st. This creates a paper trail. **Know your backup options.** If they don't provide proper documentation, the IRS can help you file Form 4852 (substitute W-2) or guide you through filing as a contractor. Don't let their non-compliance prevent you from filing your taxes properly. The bottom line is that legitimate employers don't behave this way. Whether there's intentional tax evasion or just poor record-keeping, you need to protect yourself and ensure you're filing correctly with the IRS.

This is a concerning situation that unfortunately indicates your employer may not be handling payroll taxes properly. The EIN (Employer Identification Number) should definitely be visible on your paystubs if you're a legitimate W-2 employee - there's no valid reason to hide this information. Here's what I'd recommend doing immediately: **Check your actual employment classification.** The fact that there's no EIN on your paystubs and your employer is being evasive suggests you might actually be classified as a 1099 independent contractor rather than a W-2 employee, even if this wasn't clearly communicated to you when you were hired. **Gather all documentation now.** Save every paystub, screenshot your direct deposits, and keep records of all conversations about this issue. If you need to involve the IRS later, having this documentation will be crucial. **Send one final written request.** Email your employer requesting your proper tax forms (W-2 if you're an employee, 1099-NEC if you're a contractor) by the January 31st deadline. Be professional but clear that you need this to file your taxes legally. **Know your options if they don't comply.** The IRS has procedures for situations like this. You can file Form 4852 (Substitute for Form W-2) if you're supposed to be getting a W-2, or they can help guide you through proper filing as a contractor. Don't let their unprofessional behavior prevent you from filing your taxes correctly. The IRS deals with uncooperative employers regularly and has systems in place to help employees in your situation.

Whatever approach you take, make sure you keep ALL documentation! Keep copies of: 1) Your original SSA-1099 2) Bank statements showing the lump sum coming in 3) The payment to the disability insurance company 4) The contract with the disability company requiring repayment 5) Any correspondence with SSA or the insurance company I learned this the hard way when I had a similar situation in 2021 and got a letter from the IRS. Having all my documentation ready made resolving the issue much easier.

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.