Huh? I thought multi-member LLCs were automatically treated as partnerships? We never filed any special forms when we set up our LLC 2 years ago. Does this mean we've been doing everything wrong?

You're actually correct - I should have been clearer. Multi-member LLCs are indeed automatically treated as partnerships by default (unless they elect to be treated as a corporation by filing Form 8832). You haven't been doing anything wrong if you've been treating your multi-member LLC as a partnership without filing Form 8832. I was thinking of single-member LLCs (which are disregarded entities by default) or LLCs wanting to be treated as corporations, which do require that form. Sorry for any confusion!

Not a dumb question! It typically goes on line 1a "Gross receipts or sales" on Form 1065. Though if it's for certain types of services, it could potentially go elsewhere. What kind of business is your partnership in?

That's an interesting option I hadn't thought about. Would I still need to file anything special for 2022 and 2023 to show that I'm now applying that excess to 2024? Or does just paying the penalty take care of it?

You would need to file Form 5329 for tax years 2022 and 2023 to pay the 6% excise tax for each of those years. Then when you do your 2024 taxes, you would indicate that you're applying prior year excess contributions to your 2024 contribution limit. The important thing is that you don't make a full contribution for 2024 if you're applying the excess from 2022. For example, if the 2024 limit is $7,000 and you're applying $4,630 from 2022, you would only be able to contribute an additional $2,370 for 2024. It's a good option if you're short on cash but still want to maintain your retirement savings.

The Roth income limits also increased for 2024. For single filers, the phaseout range is now $146,000-$161,000. So if OP's income is similar to 2022 (around $140k), they might be fully eligible this year without any phaseout.

That's a good point. With the new higher income phaseout ranges, OP might not run into the same problem for 2024. But they still need to address that 2022 excess contribution issue regardless of their current situation. Leaving it unresolved means continuing to pay that 6% penalty year after year.

That's smart! Do you just use a regular spreadsheet or is there a template somewhere? Also, how do you handle documents that have multiple numbers on them like investment statements?

I just use a regular Excel or Google Sheets spreadsheet that I created myself. Nothing fancy, just those columns I mentioned. For complex documents like investment statements, I expand my tracking approach. I create sub-rows under the main document listing key figures (dividends, capital gains distributions, etc.) and note the specific form boxes where those numbers should go. Sometimes I even take screenshots of the tax software entry screens and note which box on my document goes to which field in the software. It's a bit more work upfront, but it saves me tons of confusion, especially for documents that have dozens of figures on them.

I used IRS Free File last year with W-2, some freelance income, and a small amount of stocks. It worked fine for me! Just make sure you go through the IRS website (irs.gov/freefile) rather than going directly to the tax company sites. If you go direct, they sometimes don't show the free options.

Does the IRS actually notice or care if you use your work email vs personal email? I've been using my work email for everything and now I'm worried.

The IRS itself doesn't necessarily care which email you use, but your firm might. Using your work email for personal tax assistance creates potential liability and confusion about who is responsible for the work. If there's ever an issue or dispute, having your work email all over non-firm client communications blurs the line between when you're acting as a firm employee versus as an individual. It's really about professional boundaries and liability protection more than IRS requirements.

I help 8 family members but set strict boundaries - I only do simple returns and set aside specific weekends in March for "tax help days." For anything complicated, I refer them to my colleague. My advice: definitely get the POA. Being able to pull transcripts saves so much time versus playing detective with their incomplete records. Also consider using tax software that allows multiple returns under one account - makes the process much more efficient.

Is this something you have to specifically request? I paid a similar notice last year and no one mentioned anything about penalty abatement to me. I had a perfect tax record before that too.

Yes, you absolutely have to specifically request penalty abatement - the IRS will almost never offer it voluntarily! It's not widely advertised, but it's an official IRS administrative waiver. Many people qualify but never know to ask for it. If you paid penalties within the last 2-3 years and had a clean record before that, you might be able to request a retroactive abatement and get those penalties refunded. You'd need to call the IRS and specifically request "First Time Penalty Abatement" for the tax year in question, explaining that you had a good compliance history before that. It's definitely worth trying!

This is solid advice. I work in a tax office and we see this all the time. People bring in final collection notices for issues that could have been easily resolved months earlier. By that point, options are much more limited and the amounts owed have usually increased significantly.