As the executor for my sister's estate (she passed in Texas), I just went through this. Make sure you mark the W-2 as "DECEASED" and include the date of death. Also, double check how you're handling any payments made after death - those are considered income to the beneficiary/estate, not the deceased, and have different tax rules. For the marriage question - Texas does recognize common law marriage but there are specific requirements. Maybe have the husband sign a simple statement confirming they presented themselves as married to the community? That would cover your bases.

I work in payroll and deal with this regularly. One thing nobody's mentioned - if the employee had any accrued vacation payout or final wages paid AFTER death, those should be treated differently tax-wise. Those payments go on a 1099-MISC to the estate or beneficiary, not on the W-2. Also, ask for the death certificate copy for your records - you'll need it. In Texas, if they're claiming common law marriage, have them complete a Declaration of Informal Marriage form (it's a Texas state form) if they haven't already filed one with the county clerk.

Beware of contractors who promise tax credits without knowing the details! My HVAC company told me I'd get a $2,000 credit, but when tax time came, I found out my system only qualified for $1,200 because it didn't meet all the efficiency requirements. Make sure you get the manufacturer's certification IN WRITING before counting on that money. Also, keep all your receipts digitally - I learned this the hard way when my paper receipt faded after a few months and my accountant couldn't read all the details!

As someone who just went through this process myself, I'd recommend double-checking the efficiency ratings on your system's AHRI certificate before filing. The contractor's word isn't always accurate - mine told me my system qualified, but when I looked up the actual model number on the AHRI directory, it was slightly below the threshold. Also, don't wait until tax season to get organized! Request the Manufacturer's Certification Statement from your installer NOW while the paperwork is fresh. Some companies take weeks to provide it, and you don't want to be scrambling in April. Take photos of all your receipts and store them in the cloud - ink fades and paper gets lost. One more tip: if you're planning any other energy improvements (windows, insulation, etc.), be aware that there are annual and lifetime limits on some of these credits. The IRS Publication 5695 instructions have all the details on how the limits stack up.

Just a heads up to everyone having PIN problems - if you end up missing the filing deadline because of PIN issues, make sure you file for an extension using Form 4868! This gives you until October to file your actual return while you sort out the PIN stuff. The extension doesn't give you more time to pay though, so you should still estimate and pay any taxes you owe by the regular deadline to avoid penalties and interest.

Just wanted to add another option for folks dealing with PIN issues - if you're in a rural area or don't have reliable internet, you can also file a paper return without needing your IP PIN at all. You'll just need to include Form 14039 (Identity Theft Affidavit) with your paper return to explain why you can't provide the PIN electronically. The paper filing takes longer to process (usually 6-8 weeks vs 2-3 weeks for e-filing), but it's a solid backup option if you absolutely can't recover your PIN and are running up against the deadline. Just make sure to mail it certified mail so you have proof it was sent on time. This saved me two years ago when I had a similar PIN nightmare right before the deadline!

If this happened in 2021 and you haven't reported it yet, aren't you already late on reporting this income? Might there be penalties for not reporting it in the correct year?

I'm sorry for your loss, Amina. Dealing with inherited accounts while grieving is really tough. Just to clarify the timeline - you mentioned your dad passed in September 2021 and you deposited the HSA check into your checking account. When exactly did you receive and deposit that check? This is crucial because you need to report the distribution in the tax year you actually received the money, not when your father passed away. If you received the check in 2021, you should have reported it on your 2021 tax return. If you haven't done that yet, you'll need to file an amended 2021 return. If you received it in 2022, then you'd report it on your current 2022 return. The good news is that everyone here is correct - you won't owe the 20% penalty since this was an inherited distribution. But you will owe regular income tax on the full amount. If you're late reporting it, there could be additional penalties and interest, so it's important to get this sorted out as soon as possible.

Anybody know if its different when we're talking about relocation bonus vs sign on bonus? I got both when I started and the paperwork has different language for each.

One important thing to consider before making your decision - document everything related to your bonus repayment now, even before you leave. I made the mistake of not keeping copies of my original offer letter and bonus documentation when I left my previous job, which made filing my taxes much more complicated. Make sure you have copies of your original offer letter showing the bonus amount and terms, your W-2 from 2023 showing the bonus income, and any other relevant documentation. When you do leave, get written confirmation from your employer about the exact repayment amount and date - this will be crucial for your 2025 tax filing. Also, if you're planning to leave early in 2025, keep in mind that the timing of the repayment within the tax year doesn't matter for tax purposes - whether you repay in January or December 2025, it will all be handled on your 2025 return. But having everything documented upfront will save you headaches later when dealing with the IRS forms and calculations.