Has anyone here used the IRS free e-file for partnership returns? I know you can e-file Form 1065 but I'm not sure if there are any special requirements when it's a final return with that "final return" box checked. Our partnership was pretty simple with just the two of us and minimal transactions.

Just wanted to add something that might help with your timing concerns. Since you closed in March 2024, you're actually not as pressed for time as you might think. Your 2023 partnership return (covering August-December 2023) is due by March 15, 2024, but you can file an extension until September 15, 2024 using Form 7004. For your final return covering January-March 2024, that would be due by March 15, 2025 (since it's a 2024 tax year return), so you have plenty of time to get that one right. Given that your total revenue was only $8,400 with $7,200 in expenses, you're looking at a pretty straightforward situation. The net income of $1,200 split between two partners means each partner would report $600 on their personal returns. Since the amounts are relatively small, the IRS is less likely to scrutinize the return heavily, but definitely still follow the proper procedures for the final return filings. One tip: keep detailed records of exactly when you ceased operations and any final expenses related to closing the business. These closing costs can often be deducted on your final return.

Has anyone here used TurboTax Business for filing a final partnership return? Their website says the 2022 version isn't available yet, but I'm wondering if there's a workaround or if I should just bite the bullet and pay for a CPA.

Just went through this exact situation last year with my business partner! You're right that you can't file the actual 2022 return until January when the IRS systems open up, but there are definitely things you can do now to get ahead of the process. First, make sure you have all your documentation organized - final profit/loss statements, asset disposition records, and any dissolution paperwork from your state. Since you've already handled the state dissolution, you're ahead of the game there. One thing that really helped us was getting our books professionally closed before year-end. Even though we dissolved in September, having everything reconciled and ready meant we could file literally on the first day the IRS started accepting returns in January. Also, double-check if you need to make any estimated tax payments for the final quarter. We almost missed this and it would have triggered penalties. Your dissolved status doesn't exempt you from quarterly obligations through your dissolution date. The waiting is definitely frustrating when you just want to close this chapter, but use this time to make sure everything is perfect so there are no delays or amendments needed later!

Has anyone used the IRS Direct Pay system for making estimated payments? I'm trying to figure out if there's a way to see exactly when my payments were applied because I think some of mine might have been applied to the wrong quarters.

For your specific situation with the dramatic income jump from $14k to $88k, you're actually in a pretty favorable position regarding penalties. The "prior year safe harbor" rule means you only needed to pay $1,500 throughout the year (your prior year tax liability) in equal quarterly installments to completely avoid penalties. However, since you mentioned you "finally made all my quarterly estimated tax payments for the year," it sounds like you may have made late payments. If that's the case, you'll still benefit from the lower $1,500 threshold, but there will be some penalty for late payment. When filling out Form 2210, focus on Part II first to see if you qualify for any exceptions. If not, then Part III will calculate your penalty. For the annualized income method on Schedule AI, make sure you're entering your actual cumulative income through each quarter-end date, not dividing your annual income by 4. Given your uneven income pattern, this method will likely result in much lower required payments for Q1 and Q2. The $65 penalty you calculated using the annualized method sounds much more reasonable than the $720 penalty, especially if most of your income came in the latter half of the year.

Quick question - does anyone know if there are penalties for the employer for not checking Box 13 correctly? My husband's W2 has the same issue and his company is being difficult about issuing a correction. I'm wondering if mentioning potential penalties might get them to take action.

I work in tax compliance and want to emphasize something important that hasn't been fully addressed here. While everyone's right that the IRS cares about actual participation over checkboxes, having mismatched documentation can absolutely trigger audit flags. If your W-2 shows Box 14 retirement contributions but Box 13 isn't checked, and then you report on your tax return that your wife IS covered by a retirement plan (which you should, since it's factually correct), that inconsistency could flag your return for review. The IRS systems do cross-reference these things. Beyond the IRA deduction implications, this could also affect other tax benefits like the Retirement Savings Credit if your income qualifies. Getting the W-2C isn't just about being technically correct - it's about having clean documentation that matches your tax filing. I'd strongly recommend being persistent with HR. Frame it as a compliance issue rather than a personal inconvenience. Most payroll departments understand compliance language better than tax impact language.

Does anyone know if trading losses from section 1256 contracts are considered investment income for the Net Investment Income Tax (3.8% tax)? My CPA says I can use these losses to offset other investment income subject to NIIT, but I'm not sure.

I went through a very similar situation last year with K-1s showing section 1256 losses, and I can share what I learned after consulting with a tax professional. The good news is that section 1256 contract losses from partnerships are generally NOT subject to the passive activity loss limitations, even if you're not actively involved in managing the partnership. This is because they're treated as investment/trading losses rather than passive business losses. For the basis limitation, if your combined capital accounts show $45k positive after the losses, you almost certainly have sufficient basis to claim the full $16k in losses. The key thing to watch for is whether you received any distributions during the year that might have reduced your basis below what's shown in the capital account. Here's what I'd recommend: 1. Report the 1256 losses on Form 6781 as you mentioned (60% long-term, 40% short-term) 2. Check if either partnership sent supplemental statements about distributions or basis adjustments 3. If you're still unsure about your exact basis calculation, consider keeping detailed records going forward since basis carries over year to year The partnership loss limitation rules are definitely confusing when you first encounter them, but for your specific situation with investment partnerships and 1256 contract losses, they're likely not going to be a major obstacle.