Would this apply if we never actually filed jointly though? From what I understand, he just took my W2s and never filed anything at all. Can I still claim innocent spouse if there were no joint returns?

Ah good point - Innocent Spouse Relief typically applies when joint returns were actually filed with errors or underpayment. If no returns were filed at all, that's a different situation. In your case, you'd focus more on explaining the circumstances when you file your returns and potentially requesting penalty abatement due to reasonable cause. The IRS does consider situations involving domestic abuse as potential reasonable cause for penalty relief. The most important thing is to get those returns filed now and explain your situation - they're usually willing to work with you on a payment plan for any taxes owed.

Yes, First Time Abatement (FTA) can be really helpful! However, it typically only applies to one tax year. With multiple years unfiled, you might get FTA for the earliest year but would need to request reasonable cause abatement for the others.

Could you explain that with a simple example? Not sure I'm following how the liability part impacts distributions.

Sure. Let's say you and a partner each contribute $50,000 to start a business and then the partnership takes out a $200,000 loan. In a partnership, your basis would be $150,000 ($50,000 contribution plus $100,000 of the debt). This means you could receive distributions up to $150,000 tax-free. In an S-corp with the same scenario, your basis would only be $50,000 (your contribution), so distributions beyond that would be taxable. This can be a significant difference depending on your business's debt structure and distribution plans.

This is a good point. We have a partnership where one partner contributes more time but less money, so we allocate profits disproportionately to ownership. Couldn't do that with an S-corp.

That's really interesting - I hadn't considered that approach. Do partnerships typically have the ability to issue W2s to partners? I thought partners were generally treated as self-employed rather than employees.

Regular partnerships can't issue W2s to partners - you're right that partners are treated as self-employed. What we did was elect to be taxed as an S-corporation while maintaining our partnership agreement internally. An S-corp can pay wages to shareholders who work in the business. This creates the W2 wages needed for QBI calculations at higher income levels. There are some additional compliance requirements and costs with this approach, but for us, the tax benefits made it worthwhile once our incomes crossed the threshold amounts.

Do you know how far back you can amend returns for this? I think I might have missed out in previous years too!

Where did you find Excel-themed jewelry? My girlfriend is an accountant and that sounds perfect for her birthday coming up!

I found it on Etsy! There are several artists who make spreadsheet-inspired necklaces and earrings. Some use the actual Excel icon, while others create pendants that look like spreadsheet formulas or functions. Search for "excel jewelry" or "spreadsheet jewelry" and you'll find plenty of options. There's also a shop that makes custom formula bracelets where you can put in your own Excel formula (my wife loves VLOOKUP so I got her that one). They're surprisingly elegant looking while still being a perfect inside joke for spreadsheet lovers.

Omg that's actually brilliant! Did it really look like your friend? I'm worried it might come out looking creepy rather than funny.

Does anyone know if FreeTaxUSA can handle 1099-INT from IRS refunds? That's what I'm planning to use this year, but now I'm worried it might not work for this situation.

Yes, FreeTaxUSA can definitely handle 1099-INT forms from IRS refunds in their free version. I switched to them last year after getting frustrated with TurboTax's upselling. FreeTaxUSA includes all these forms in their standard free package - you only pay for state filing. They have a section specifically for interest income where you can enter all the 1099-INT information including the payer's TIN/Federal ID Number.

The IRS only sends a 1099-INT if they paid you interest on your refund. If your refund was delayed beyond 45 days after the filing deadline, they're required to pay interest. So if you got your refund quickly last year, you wouldn't get this form.