Question - does this tax free status apply to internet reimbursement too? My company gives us $50/month for internet since we work remotely but includes it in our taxable wages.

Thanks everyone for the detailed explanations! This has been super helpful. I feel much more confident now that my company's $100/month phone stipend is legitimate and tax-free. Just to confirm I understand correctly - as long as my employer has a policy requiring me to use my phone for business (which they do), and the reimbursement amount is reasonable (which $100 seems to be), then this shouldn't appear in Box 1 of my W-2 as taxable income, right? I'm going to double-check with our HR team to make sure they're handling this correctly. Based on what I'm reading here, it sounds like some employers mess this up and accidentally include these reimbursements as taxable wages when they shouldn't. Really appreciate all the practical advice about what to look for on the W-2 and how to verify everything is being handled properly!

Just to add another perspective on the IRS contribution limits - it's worth noting that while your employee deferrals are capped at $22,500 total across all plans, if you end up with excess contributions due to payroll timing issues (like if Job 1's payroll doesn't know about Job 2), you'll need to request a return of excess contributions before the tax deadline to avoid penalties. I'd also suggest looking into SEP-IRA or SIMPLE IRA options if Job 2 is flexible about retirement benefits - sometimes smaller employers find these easier to administer than traditional 401k plans, and they might be willing to set something up if you approach them about it. While you still couldn't contribute more employee deferrals, they could potentially make employer contributions that don't count against your $22,500 limit. One more thing on the backdoor Roth strategy - given your $160k MAGI, make sure you're not missing out on any other tax-advantaged accounts first. If you have dependents, a 529 plan might make sense. Also, if either employer offers a dependent care FSA, that's another $5,000 of tax savings you could capture before moving to taxable accounts.

This thread has covered the main points really well, but I wanted to add one practical tip that saved me a lot of headache when I was in a similar situation with multiple W2 jobs. Since you're already maxing out at Job 1, I'd recommend reaching out to Job 1's payroll/HR and letting them know you have a second job where you might want to make 401k contributions. Some payroll systems can actually track your year-to-date contributions across multiple employers if you provide them with your other job's contribution information. This helps prevent the over-contribution issue that @ebd0c4c51e33 mentioned. Also, even though Job 2 doesn't offer matching now, I'd still enroll in their 401k plan if available and set contributions to $0. This way you're already in the system if they add matching later or if your income situation changes and you need to rebalance contributions between jobs. One last thing on the backdoor Roth - with your $160k MAGI, you're in that sweet spot where it definitely makes sense. Just make sure to do it early in the year after cleaning up any existing Traditional IRA balances, and consider doing it as a single large contribution rather than monthly to minimize the time your money sits in the Traditional IRA earning gains (which would complicate the conversion taxes).

The red flag for me is that this person makes $75k and claims ZERO withholding? That's way past the threshold where anyone could reasonably claim exemption. For 2025, you basically need to expect to make less than the standard deduction (around $14,000 for single filers) to legally claim exemption. I'd recommend checking IRS Publication 15 (Circular E) section on "Withholding From Employees' Wages" which specifically addresses invalid Forms W-4. Your payroll provider should absolutely know better - they're giving terrible advice if they're just pointing to the exemption section without mentioning the income threshold issue.

This is a serious compliance issue that needs immediate attention. As a tax preparer who's seen similar situations, I can tell you that someone making $75K annually cannot legitimately claim exemption from federal withholding unless they have extraordinary circumstances (which would be extremely rare at that income level). The IRS is very clear about this - to claim exemption, you must expect to owe NO federal income tax for the year. With a $75K salary, even after the standard deduction, this person would owe several thousand dollars in federal taxes. Your concern about company liability is absolutely justified. The IRS can and will hold employers responsible for accepting obviously invalid W-4 forms. You should document this issue immediately and escalate it to your company's owner or HR department. The longer this continues, the worse the potential penalties become. I'd strongly recommend having your company request a corrected W-4 from the managing director immediately. If he refuses, you should withhold taxes as if he's single with no allowances - that's what the IRS requires when you can't rely on the employee's W-4. Don't let "we're just following his instructions" be your only defense when the IRS comes knocking.

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.

I've been dealing with similar frustrations with traditional CPAs and their outdated approaches. While I haven't worked with Dark Horse specifically, I did want to share what I learned during my search for a more strategic tax advisor. One thing that really helped me was creating a list of specific questions to ask during consultations. Beyond the tech capabilities, I focused on asking about their proactive planning process - do they reach out mid-year with suggestions, or do they only contact you when it's time to file? The best CPAs I interviewed had systematic processes for quarterly check-ins and year-end planning calls. I also found it valuable to ask for case studies or examples of tax savings they've achieved for clients in similar situations to mine. The responses really separated the strategic planners from those just doing compliance work. The remote/digital aspect is definitely important for convenience, but I'd recommend making sure they still offer regular communication and aren't just a "upload your documents and we'll get back to you" service. Tax planning really benefits from ongoing dialogue about your financial goals and life changes throughout the year.

I've been following this thread with great interest as I'm in a similar boat - tired of CPAs who only focus on compliance rather than strategic planning. The discussion about asking specific interview questions really resonated with me. One thing I'd add is to also ask potential CPAs about their experience with tax law changes and how they communicate those changes to clients throughout the year. The best tax planners I've encountered proactively reach out when new legislation or IRS guidance affects their clients' situations, rather than waiting until the next filing season. I'm particularly interested in the mentions of taxr.ai for identifying missed opportunities. Has anyone here used it to prepare for CPA interviews specifically? It sounds like it could be a great way to test whether a prospective CPA is truly knowledgeable about advanced planning strategies by seeing how they respond to the AI's findings. The remote vs. in-person debate is interesting too. While I appreciate the convenience of digital workflows, I've found that the best tax planning conversations happen when there's real dialogue about your goals and circumstances. Whether that's via video call or in-person seems less important than having a CPA who asks the right probing questions about your financial future.