18 Free File Fillable Forms don't support business returns unfortunately. They're only for individual Form 1040 filing. I looked into this last year for my low-revenue LLC and had to go another route. Partnership returns require either paid software, paper filing, or hiring a professional.

9 Thanks for clearing that up. That's disappointing - you'd think the IRS would want to make it easier for small businesses to file properly. Guess I'll look into paper filing or the other options mentioned in this thread.

19 You had me excited for a second there! I was already googling "1065-EZ" before I finished reading your comment. It's crazy that they don't have a simplified version for tiny partnerships.

How much did you end up having to pay in back taxes and penalties when they disallowed your arrangement? I'm worried about setting this up wrong and facing a similar situation.

We had to pay back about $5,400 in taxes that we thought we had saved, plus another $1,100 in penalties and interest. The worst part was having to amend two years of returns and losing all those medical deductions we thought we had legitimately claimed. The IRS agent specifically told us our arrangement failed because: 1) I had no regular wages separate from medical reimbursements, 2) We couldn't provide documentation of actual work performed, and 3) We didn't have formal plan documents in place before starting reimbursements. They viewed the whole thing as just a tax avoidance scheme rather than a legitimate employment arrangement. If you set it up correctly from the beginning with proper documentation and treat it like a real employment relationship (regular wages, taxes withheld, formal plan documents), you should be fine. But definitely don't try to cut corners!

Definitely not! The plan has to be formally established BEFORE any expenses can be reimbursed. If you try to backdate documents, that's a huge red flag for the IRS. You could set it up now for future expenses, but anything before the plan's official establishment date wouldn't qualify.

Our company actually does offer those pre-tax transit benefits, but most employees don't take advantage of them. Do you know if there's any way to make driving expenses pre-tax too? Most of our staff drives rather than using public transportation.

For driving expenses, the pre-tax benefits primarily cover parking costs at or near your workplace, up to $300/month. The actual driving expenses (gas, maintenance, etc.) can't be made pre-tax unless it's part of a qualified vanpool arrangement. If your employees are mostly drivers, highlight the parking benefit since it can save them 20-37% on those costs depending on their tax bracket. Some companies also offer incentives for carpooling or subsidize vanpools to help with commuting costs. These can be provided as tax-free fringe benefits under certain conditions. Worth exploring if you're trying to encourage more in-office work.

That's incredibly privileged thinking. Many people can't afford to live near their workplace, especially in high cost cities. And "just find a job closer to home" isn't realistic for specialized careers or in areas with limited job options.

You're right, I didn't consider the housing affordability crisis in many areas. I was thinking purely from an environmental perspective, but there are social equity issues too. Maybe a better approach would be targeted deductions for lower-income workers who are forced to commute long distances due to housing costs, rather than blanket deductions that would mostly benefit higher-income taxpayers. Or better yet, improve public transportation and make that more widely available as a pre-tax benefit.

Thank you so much! I'll send you a message right away. When you implemented it, what was the most challenging part for a very small operation? And did you find any particular resources helpful for the risk assessment portion?

The most challenging part was definitely creating reasonable security controls for customer data without breaking the bank. Simple things like implementing password managers and enabling two-factor authentication gave us big security improvements without major costs. We also created a very basic security training that takes about 20 minutes to go through with new employees. For the risk assessment, NIST has a publication called "Small Business Information Security: The Fundamentals" (NISTIR 7621) that was incredibly helpful. It has a straightforward approach to identifying your most important information assets and the realistic threats to those assets. Much more practical than the enterprise-focused guides I found elsewhere.

Great question about applicability. A WISP is legally required in some states (like Massachusetts) for any business that collects personal information of residents, regardless of size. In other states, requirements vary. However, even when not strictly required by law, many client contracts and cyber insurance policies now require a documented security program. So it really depends on what kind of information the business handles, where their customers are located, and what contractual obligations they have. Since the original poster mentioned it's required for a new client, that's likely a contractual requirement rather than a statutory one.

Did you get the full amount you were expecting? I'm worried because mine says "approved" but with a slightly different amount than I calculated.

Yes, I got exactly the amount shown on the "Where's My Refund" tool. If your approved amount is different than what you calculated, the IRS probably made an adjustment to your return. This happens a lot - they might have caught a math error or determined you qualified for a different credit amount than what you claimed. The good news is that once it shows "approved" with a specific amount, that's what you'll get deposited. You should receive a letter in the mail explaining any adjustments they made to your original return.

Thanks for the tip! I'll definitely check early morning. My credit union sometimes posts government payments early too. Feeling less anxious now hearing everyone's experiences.