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Q. Should the income on the w2 be reduced by expenses i'm being reimbursed for ? A. No. Since 2018, W-2 employees are not allowed to deduct employee expenses.  If your employer included expense reimbursement, on your W-2, then it is taxable income to you.    But, the bigger question is: should your employer include expenses reimbursement on your W-2.   The answer is it depends on the employer's reimbursement policy.  The simplest explanation goes like this: if your employer give you a fixed "allowance" for expenses, then that allowance is taxable income to you and should be included on your W-2.   If you account to your employer, in the form of an expense report for your exact expenses, and that's what they reimburses you for (an "Accountable plan"), then the amount is not taxable or reported on your W-2.    If it's included on your W-2, it's taxable and you can not take a deduction, on your federal return (some states allow a deduction, on the state return).  Your only remedy is a corrected W-2 from your employer.    You may want to talk to your employer about switching you to an "accountable plan" for expense reimbursement (it does not get added to your W-2 as taxable income), instead of a fixed allowance. On the other hand, if the allowance is generous, you may be better off paying taxes on it.    

Q. Based on the information provided do we actually qualify for the Earned Income Credit under these circumstances? A. Yes. Note the wording on form 15111, "Did the child live with you (or your spouse, if you filed a joint return for 2024) in the U.S. for more than 6 months"   Q. Is it appropriate and advisable to submit Form 15111 as requested by the IRS? A. Yes,  since the IRS letter instructed you do so and you now know that you do qualify for the EITC.    Q. Are there any potential risks or important considerations I should be aware of before responding to this notice? A. Not that I know of.  It seems pretty straight forward.  You didn't know you qualified for the EITC and the IRS computers caught it.     

I got married in October 2024 to a single mother who has a biological child. For the 2024 tax year we filed jointly with me as the primary taxpayer. My spouse did not have any income in 2024. We claimed the child as a dependent but I did not claim the Earned Income Credit (EIC) because I believed the child did not live with me for more than half the year. The child has lived with his biological mother who's now my wife his entire life.   I recently received IRS notice CP09 which states "You may qualify for a refund of up to $7,830.00. Your 2024 tax return shows that you have kids and might qualify for extra cash through the Earned Income Credit (EIC) but you did not claim the EIC on your return.” The notice instructs me to complete and submit Form 15111.   I am seeking expert advice on the following: -Based on the information provided do we actually qualify for the Earned Income Credit under these circumstances -Is it appropriate and advisable to submit Form 15111 as requested by the IRS -Are there any potential risks or important considerations I should be aware of before responding to this notice   Thank you for your guidance

@dmertz    Okay so just to be sure I understand, invoking section 301.9100-2 would only be done if someone removed 2024 excess contributions after April 15th and before October 15th?   Sorry to be so needy. This is quite a complex puzzle. Again grateful for your input!

this is from IRS instructions for K-1 Item L The partnership must report your beginning capital account and ending capital account for the year using the tax-basis method, including the amount of capital you contributed to the partnership during the year, your share of the partnership's current year net income or loss as computed for tax purposes, any withdrawals and distributions made to you by the partnership, and any other increases or decreases to your capital account determined in a manner generally consistent with figuring the partner's adjusted tax basis in its partnership interest (without regard to partnership liabilities), taking into account the rules and principles of sections 705, 722, 733, and 742. See the Instructions for Form 1065 for more details.     overrides will prevent e-filing. the tax consequences of not following the directions are unknown.  By the way tax basis has been the rule since at least 2021  

if the partnership didn't terminate, you have a passive loss. passive losses can only be deducted against passive income. one exception to this is for real estate activities in which you actively participated, and your adjusted gross income is under $150,000. Then up to $25,000 in losses from real estate activities would be allowed (see form 8582). the other exception is if this was a final k-1 - the partnership terminated    Material participation and active participation are different.  FROM IRS PUB 925 Active participation depends on all the facts and circumstances. Factors that indicate active participation include making decisions involving the operation or management of the activity, performing services for the activity, and hiring and discharging employees. Factors that indicate a lack of active participation include lack of control in managing and operating the activity, having authority only to discharge the manager of the activity, and having a manager of the activity who is an independent contractor rather than an employee.        

Alaska, California, Colorado, Hawaii, Idaho, Kansas, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oregon, South Dakota, Utah, Washington, Wyoming   recommended to use a tracking service so you know that the IRS gets it. items do get lost in the mails and with mailing the IRS does not acknowledge receipt. it could sit in a mailbag for a month or more before it gets processed.   Department of the Treasury Internal Revenue Service Ogden, UT 84201-0002

Any income under $600 annually does not have to be reported to the IRS.  Even if a 1099 NEC was sent to the IRS for you, if it's under $600, you won't get in any trouble with Uncle Sam if you don't file.  Now if it's like $595, or pretty close to that $600 mark, I personally would go ahead and file.  But, it's not legally required.  I hope this helps answer your question.