So, when playtesting the rules I've found myself with the following questions.

1. How many TPs am I required to spend so my formations can "advance to contact"? Say, I ordered a division to move within 2 BW and spent 1TP. Would I be required to spend the amount I needed to move it or how does it work? Is it possible to advance into contact from the movement phase (say if I ended up with a unit within 1 BW and use my move to "crash" into the opponent.

2. After every turn on which a formation went into combat, you have to test morale, yes? I've found its incredibly deadly to fight any combat, as it's difficult to role under a 3 or 4 , more so if any bases are shaken. I find it odd for units to become immediately spent, but I'm not sure if I'm playing it correctly.

Looking forward to your answers.

1. You don't need to spend extra tempo points to advance to contact, it is just a move (although I don't quite follow your description above, I am sorry). So it is not only possible, it is necessary to advance into contact in the movement phase. You allocate TPs, move your forces and if you are in contact, go through the procedure in the contact phase.

2.Yes, you are playing it correctly. Formations with a single base are very fragile - even if they are unshaken, and you roll a 5-6 on the d6 for morale, they become spent. OTOH, if your army is organized that way you do get a lot of formations, so there is a degree of robustness at the army level, plus more TPs, even if they are much less efficient at using them. In any case, if you want them to be a bit more robust, delete 'equal or' from the second paragraph of 'Force Morale' in Col 2, p.21 - that stops the possibility of a single-base formation becoming spent even if unshaken.

1. Yes, that's how I was playing it, but I wasn't quite sure if there was a double spending of TPs 

2. I'll try that, I've still got some tinkering to do with the rules. 

Now that you mention spent forces, how is "returning to the baseline" represented? Do I just remove them off the board? Do I make them retreat? 

You can do either with spent forces. For myself, I have tended to leave them on the table for campaign games (I count them as prisoners if they are contacted by cavalry or otherwise trapped) and not bothered in single battle scenarios.