I'm in a very similar situation right now - we owe from 2022 due to my freelance income issues and have been on a payment plan since last fall. Based on everything I've read here and my own research, yes, they will definitely take your refund automatically even though you're making payments on time. What's been helpful for me is thinking of it as an accelerated payment rather than losing money - it's still going toward the same debt, just all at once instead of spread out over months. I'm actually planning to adjust our withholding for 2024 so we break even or owe a small amount rather than getting a refund that will just be taken again next year. One thing I'd recommend: screenshot or print your current payment plan details from the IRS website before you file, including your balance and number of remaining payments. That way you have a record to compare against when their systems eventually update after the offset. Several people mentioned the lag time in their systems, so having your own documentation seems really important. File as soon as you have all your documents - there's no benefit to waiting, and at least you'll know sooner rather than later what happened to your refund. Good luck navigating this! It's stressful but it sounds like everyone who's been through it came out okay on the other side.

I just went through this exact situation and can confirm what everyone else is saying - yes, they will absolutely take your refund even though you're on a payment plan. I was in the same boat last year owing from 2021 taxes and had been making payments for about 8 months when tax season rolled around. Here's my timeline so you know what to expect: Filed our return in mid-February expecting a $1,650 refund, got the "refund applied to past due obligation" message on Where's My Refund about 18 days later, and received the official notice explaining the offset about 2 weeks after that. The frustrating part was that their online payment portal didn't update to show the new balance for almost 7 weeks, so I was flying blind for a while. My biggest piece of advice: Keep making your regular monthly payments exactly as scheduled, even after you see the offset happened. Don't try to skip a payment thinking the refund covers it - that's not how it works and could mess up your payment agreement. The offset just reduces your total balance and shortens your payment timeline. Also, I'd definitely recommend calling them about 3-4 weeks after you see the offset to verify it was applied correctly. I found out mine was initially credited to the wrong tax year and had to get it fixed. Better to catch those kinds of errors early than deal with collection issues later. The silver lining? My 36-month payment plan became a 22-month plan overnight, which will save me quite a bit in interest. Good luck!

Can both parents in the same household file as Head of Household? I thought there was some rule against that if you live together?

Hey Sean! Congratulations on the upcoming baby! Your situation isn't as complicated as you think. You're absolutely right that you can file as Head of Household based on your new baby, even with a December birth. Here's the key thing everyone's touched on but I want to emphasize: for Head of Household, you need YOUR qualifying person. Your girlfriend's son doesn't count for YOUR filing status since you're not married yet - he's not legally your stepchild. But that's totally fine because your biological child will be your qualifying person. The December timing works in your favor too. As others mentioned, the "more than half the year" rule for a newborn only applies to the time since birth, not the full calendar year. One practical tip: start keeping detailed records NOW of all household expenses you pay (rent/mortgage, utilities, groceries, etc.). You'll need to show you paid more than half the cost of maintaining the home. This becomes especially important since you and your girlfriend will both potentially be filing as Head of Household from the same address - the IRS may want to see clear documentation of who paid what. Good luck with the baby and congratulations on the upcoming wedding next summer!

I work at a credit union and see this exact situation pretty regularly. The "already verified" message doesn't mean your check is bad - it just means the check has been run through a verification system once already. Target's system likely did verify it was legitimate but then couldn't process it due to their internal limits or policies. A few tips from someone who processes these daily: - Credit unions are often more flexible with government checks than big banks - If you have any bank account anywhere, even a small balance, depositing there is your best bet - Treasury checks (which tax refunds are) have a 1-year expiration, so you have time to figure this out - The issuing bank route mentioned above is solid advice - they legally have to honor their own checks Don't stress too much about the verification flag. It's more of a tracking thing than a problem with your actual check. You'll get your money!

I had almost the exact same experience with Jackson Financial last year! The "already verified" thing is super confusing but it doesn't mean your check is ruined. What helped me was calling Jackson Financial directly and asking them to walk me through the best places to cash it in my area. They actually had a list of banks and credit unions that regularly work with their refund checks without issues. Also, if you're really stuck, Jackson Financial might be able to help you reissue the refund as direct deposit for a small fee. It's not ideal since you've already waited for the money, but it could save you more driving around and frustration. I ended up going that route and got my refund deposited within 3 business days. Don't give up - that money is definitely yours and there are multiple ways to get it! The verification flag is just a speed bump, not a roadblock.

This is such a common situation unfortunately! I went through something similar last year and learned the hard way that the IRS has very specific criteria for determining employee vs contractor status. The key factors are behavioral control (do they control HOW you work?), financial control (do they control the business aspects of your work?), and the type of relationship. Working in their office on a set schedule with their equipment strongly suggests you should be classified as a W-2 employee. The fact that they didn't mention this during interviews is concerning - legitimate contractor relationships are usually discussed upfront since they're fundamentally different from employment. At $27/hour for 20-30 hours weekly, you're looking at roughly $1,100-$3,500 in additional self-employment taxes annually compared to W-2 status. Plus you'll need to make quarterly estimated payments and handle your own benefits. I'd recommend having a direct conversation with them about proper classification before accepting. Most legitimate employers will appreciate you bringing this up professionally rather than discovering compliance issues later. If they refuse to consider W-2 status, that tells you something important about how they operate. Good luck with whatever you decide - trust your instincts on this one!

This is exactly why I always research employment classification before accepting any position! The IRS has a really helpful publication (Publication 15-A) that outlines the specific criteria for determining worker classification. One thing that hasn't been mentioned yet - if you do end up taking a contractor position, make sure you get everything in writing. A proper independent contractor agreement should specify deliverables, deadlines, and payment terms rather than hourly schedules and office requirements. Also, keep detailed records of everything work-related if you go the W-9 route. While commuting isn't deductible, you might be able to deduct things like a portion of your phone bill, office supplies you purchase, or professional development costs depending on the nature of the work. But honestly, based on what you've described (in-office work, set hours, their equipment), this really sounds like an employee relationship. The fact that multiple people here have successfully gotten reclassified suggests it's worth having that conversation. Don't let them take advantage of you just because you need the job!

The whole scholarship taxation thing is SO confusing. From what I understand after dealing with this myself: 1. Scholarships for tuition, fees, books, and supplies required for courses = not taxable 2. Scholarships for room, board, travel, optional equipment = taxable 3. Scholarships that require you to provide a service = taxable as wages It sounds like your program might fall into category 3 since you had to complete specific "milestones" to earn the money. That's probably why they issued a 1099-NEC. But I think they should have been SUPER clear about this from the beginning rather than calling it a scholarship and then surprising you with tax forms. Could you reach out to the program administrators and ask them to explain why they classified it this way? Maybe they made a mistake.

I went through something very similar with a college readiness program that issued me a 1099-NEC for what they had always called a "scholarship." The frustrating part is that these programs often aren't clear about the tax implications upfront, and students get blindsided at tax time. Here's what I learned: the IRS doesn't just look at what the program calls it, but how it actually functions. If you had to complete specific tasks or milestones to earn the money, they often classify it as compensation for services rather than a traditional scholarship. It's frustrating, but not necessarily wrong from a tax perspective. That said, you're not stuck with the full tax burden. If any portion of that $1,620 went toward qualified education expenses (tuition, required books, lab fees, etc.), you can still exclude that portion from taxable income. You'll need to document exactly what the money was used for and include an explanation with your return. I'd recommend contacting the program first to ask why they classified it as non-employee compensation and request any documentation about the educational purpose of the funds. Sometimes they'll work with you to provide additional paperwork that helps with the tax classification. Don't give up - there are definitely ways to reduce that unexpected tax bill!