I had this exact issue in 2022! The simplest solution ended up being asking my employer to issue a corrected W-2 for the year I received the overpayment (which would be 2023 in your case). They were resistant at first, but after I showed them guidance from the IRS about wage corrections, they eventually did it. This approach completely avoided the repayment deduction issue because it essentially "erased" the overpayment from my prior year income, which meant I could file an amended return for 2023 to get back the taxes I paid on that money.

You're in a frustrating but unfortunately common situation. Here's what I'd recommend based on your $2,400 repayment amount: First, immediately check with your payroll department to see HOW they're processing your repayments. Are they being taken as post-tax deductions from your paycheck, or are they actually reducing your gross wages before taxes are calculated? This is crucial - if they're reducing your gross wages, you're already getting the tax benefit you deserve. If they're NOT reducing your gross wages (which sounds likely based on your description), you need to push back. Reference Revenue Ruling 2009-151, which allows employers to adjust current year W-2 wages for repayments of prior year wages when done through payroll deduction. Your HR was actually partially correct - they CAN and SHOULD reduce your taxable wages, they're just not doing it properly. Document everything: your original overpayment amount, repayment schedule, and current pay stub treatment. If your employer won't cooperate, you might need to escalate this or consider getting professional help, because you're absolutely right that paying taxes twice on the same money is unfair. The $3,000 threshold in Pub 525 is real, but it shouldn't apply if your employer handles the repayments correctly through payroll adjustments rather than expecting you to claim a suspended deduction.

I went through this exact same nightmare last year! The hyphenated last name is almost certainly your issue. Here's what finally worked for me: First, try entering your name in ID.me exactly as it appears on your most recent tax return if you have a copy. Even if your parents filed it, your name should appear consistently with how the IRS has it stored. If you don't have that, here are the variations to try with your hyphenated name: - With the hyphen: "Smith-Jones" - Without the hyphen but with a space: "Smith Jones" - Without the hyphen, no space: "SmithJones" - Sometimes they store it as two separate last names Also, make sure you're using your full legal first name, not a nickname. If your birth certificate says "Elizabeth" but you go by "Liz," use Elizabeth. The other thing that helped me was checking my credit report first - sometimes the way your name appears there matches how it's stored in government databases, since they often cross-reference the same sources. Don't panic about the deadline! You can always file for an extension if needed, and like someone else mentioned, you can enter "0" for prior year AGI if you absolutely can't retrieve it. The IRS would rather have your return with a small processing delay than not have it at all.

I went through this exact same issue a few months ago and it was incredibly frustrating! The ID.me error 6001 is definitely a name formatting mismatch between what you entered and what the IRS has on file. Since you mentioned you have a hyphenated last name, that's almost certainly the culprit. Government systems are notoriously inconsistent about how they handle special characters like hyphens. Some store them, others strip them out, and some replace them with spaces. Here's what I'd recommend trying first before calling anyone: 1. Try your name with the hyphen, without the hyphen (as one word), and with a space instead of the hyphen 2. Make sure you're using your full legal first name exactly as it appears on official documents, not any nicknames 3. Double-check that you're not accidentally adding extra spaces anywhere If those don't work, calling the IRS at 1-800-829-1040 is actually your best bet. Yes, the wait times are terrible, but they can verify your identity using other information and tell you exactly how your name appears in their system. I ended up having to do this and the agent was actually very helpful once I got through. Don't stress too much about the deadline - you can always file for an extension if needed, and entering "0" for prior year AGI won't prevent you from filing. The IRS deals with these verification issues constantly during tax season.

I went through something very similar a few years ago with a forgotten investment that generated a surprise K-1. The key thing to remember is that this situation is much more common than you'd think, especially with complex investments like UVXY. Since you're dealing with a passive loss from a PTP (publicly traded partnership), there are a few specific things to keep in mind beyond just filing the 1040-X. The passive activity rules can be tricky - if you don't have other passive income to offset this loss against, you might not be able to use the full $3,200 deduction this year, but it will carry forward until you can use it. One thing that really helped me was keeping detailed records of the amendment process. Make copies of everything - your original return, the K-1, and your amended return. Also, when you file the 1040-X, include a brief explanation of why you're amending (received late K-1) in Part III of the form. The IRS is very familiar with late K-1 situations, so don't stress about red flags. They know these documents often arrive after the filing deadline. Take your time to get it right rather than rushing - you have three years from the original due date to file the amendment.

You'll need to track the passive loss carryforward yourself - the IRS doesn't maintain these records for you. I'd recommend keeping a simple spreadsheet or document that tracks your unused passive losses by year and source. Many tax software programs will also help track carryforwards if you use the same software each year and import your prior year return. When you do have passive income in future years (or dispose of the entire passive activity), you'll report the carryforward losses on Schedule E. Make sure to keep copies of this year's amended return and the K-1 in your permanent tax records - you may need to reference them years from now. For the 1040-X explanation, keep it simple but clear. Something like "Amendment due to receipt of late K-1 from UVXY showing passive loss not included in original return" is perfect. This gives the IRS context for why you're amending and helps them process it more efficiently. One more tip: consider setting up a simple tracking system for any future investments that might generate K-1s. Many people get surprised by these because partnerships and PTPs have different reporting timelines than regular stocks. Having a list of all your investments and their expected tax documents can prevent this situation in the future!

Has anyone here dealt with reporting suspended EBIE on partner tax returns when there's a partial disposition of a partnership interest? The regulations aren't super clear on how to allocate the suspended EBIE in that scenario.

This is a complex area that I've been wrestling with in my practice as well. One thing to keep in mind is that the proposed regulations under 163(j) specifically address the treatment of suspended EBIE when partnerships change their election status. Even though Partnership A is making the 163(j) election going forward, the suspended EBIE from 2018 and 2019 doesn't just disappear. The key is understanding that this suspended amount is tracked at the partner level, not the partnership level. Each partner maintains their own "bucket" of suspended EBIE from each partnership. Beyond the CARES Act relief allowing 50% deduction of 2019 EBIE, the remaining suspended amounts will indeed carry forward until one of the triggering events occurs - either the partnership generates excess taxable income/excess business interest income in future years, or the partner disposes of their interest. What's interesting about your situation is that even with the 163(j) election, Partnership A could still potentially generate excess amounts in future years if its income profile changes significantly. The election doesn't permanently eliminate this possibility, it just makes it less likely given the trade-off you're making with depreciation periods. I'd recommend keeping detailed records of each partner's suspended EBIE by year and partnership, as this will be crucial for proper reporting when disposition or other triggering events eventually occur.

This discussion has been incredibly thorough and helpful! I'm facing a similar situation where my consulting business took off in 2023, pushing our household income well above $150k for the first time. One thing I'd add that hasn't been mentioned is the importance of considering state tax implications alongside the federal 110% rule. I discovered that my state (New York) has its own estimated payment requirements that don't necessarily align with the federal safe harbor rules. Even though I was perfectly compliant with the federal 110% rule, I still owed penalties to the state because their calculation works differently. Also, for anyone who might be in their first year of self-employment or consulting income, don't forget that the 110% calculation needs to include self-employment taxes from your prior year return, not just income taxes. I initially missed this and had to scramble to make an additional payment when I realized my safe harbor amount was higher than I'd calculated. The spreadsheet tracking approach mentioned by others is spot on - I created a simple tracker that shows federal vs state requirements side by side, which has been invaluable for staying organized across multiple jurisdictions and tax types.

As someone who just navigated this exact situation last year, I can confirm you're on the right track! The 110% rule was a lifesaver when my income jumped significantly due to a job change and stock vesting. One thing that really helped me was setting up automatic estimated payments through EFTPS early in the year. I calculated my 110% requirement based on our 2022 joint return, then divided it across the four quarterly deadlines. This gave me better cash flow management than making one lump payment in January. Also, make sure you're including ALL taxes from your 2022 return in the calculation - not just federal income tax, but also any self-employment tax, AMT, or other taxes that appeared on your return. I initially miscalculated by only looking at the income tax line and had to make a correction payment. The peace of mind is absolutely worth it. Even if you end up overpaying relative to your actual 2023 liability, you avoid penalties and any overpayment just becomes a refund or credit toward 2024. Given that you're keeping investments in place rather than panic-selling, you're making a smart strategic choice that the safe harbor rule is designed to support.