Fyi this happened to me with a relocation package too. Here's what I learned: the "special accounting rule" is something employers can elect to use, BUT they have to consistently apply it to all employees. Also, the benefit has to be "provided" in Nov/Dec - the date they paid the invoice doesn't matter, it's when you received the service.

Your instincts are absolutely correct - they can't apply the special accounting rule to benefits provided in August/September. The rule specifically states benefits must be "provided" in the last two months of the year, not just paid for then. I'd recommend documenting everything: your original move date, when your belongings arrived, any communications about the relocation timeline. Then send a formal written request to HR citing IRS Pub 15-B and requesting they issue a corrected 2023 W-2. If they refuse, you have options. You can file Form 4852 with your 2023 return to report the correct amount, or contact the IRS directly for guidance. Don't let them push this to 2024 just because it's easier for their accounting - you'll end up paying tax on income you should have reported last year, potentially affecting your tax brackets and other calculations.

OP, I think your $50k proposal would have to come with MASSIVE tax increases on higher incomes or huge spending cuts. The federal government collected about $2.2 trillion in individual income taxes last year. Exempting the first $50k would eliminate a huge chunk of that. To make up the difference, tax rates on higher incomes would probably need to double or triple. Or we'd need to cut major programs like Social Security, Medicare, defense, etc. This is why tax policy is so complicated - everything is a trade-off. I'm not saying we shouldn't help working people, but we need realistic plans.

I've been following this discussion with interest, and I think there's merit to exploring a higher tax-free threshold, though maybe $50k is ambitious as a starting point. What if we looked at it incrementally? Currently, the standard deduction is around $14,600 for single filers. What if we gradually increased that to $25,000 over a few years and studied the economic impacts? That would still provide significant relief for working families while being more fiscally manageable. I also think we need to consider regional cost-of-living differences. $50,000 goes much further in rural areas than in places like San Francisco or New York. Maybe a variable standard deduction based on local housing costs could be part of the solution? The complexity issue is real too - I spent way too much time on my taxes last year trying to figure out which deductions I qualified for. A higher standard deduction combined with fewer itemized deductions might actually simplify things for most people while providing the relief that working families need.

Just to add another perspective - I've been doing multiple side hustles for about 3 years now and learned this the hard way my first year. You absolutely need to report ALL income, even if it's just $20 from a random odd job. The $600 thing that confuses everyone is just about when companies are required to send you tax forms, not when you're required to report. What really helped me was setting up a simple spreadsheet at the beginning of each year with columns for date, source, amount, and any expenses. I update it weekly so I don't forget anything. Even for cash jobs where there's no paper trail, I still log it. The IRS expects you to track and report everything, and honestly it's not worth the risk of an audit over unreported income. For your eBay sales of personal items, as long as you're selling them for less than you paid originally, that's not taxable income since there's no profit. But your delivery driving, streaming tips, and creator earnings all need to be reported regardless of the amounts.

This is exactly the kind of confusion that trips up so many gig workers! I went through the same thing when I started doing multiple side hustles. The key thing to remember is that the $600 threshold is NOT about when YOU need to report income - it's about when companies are required to send YOU tax forms. You need to report ALL income from every source, no matter how small. So yes, your delivery driving, streaming tips, and content creator earnings all need to be reported, even if some are under $600 individually. For your eBay/Marketplace sales, if you're just selling personal items for less than you originally paid for them, those aren't taxable since there's no profit involved. But if you're flipping items or made any profit, then those sales count as income too. My advice: start keeping a simple log of all your income sources now. Even a basic spreadsheet with date, source, and amount will save you so much headache come tax time. And don't forget you can deduct legitimate business expenses like mileage for delivery driving, equipment for content creation, etc. Good luck!

This thread has been incredibly helpful! I'm dealing with a similar situation but with an additional wrinkle - we have some employees who are independent contractors working across multiple states. From what I understand, the withholding rules are different for 1099 workers, but I'm struggling to find clear guidance on whether we need to track their work locations for state tax purposes or if that responsibility falls entirely on them. Also, for companies that have implemented tax equalization programs - how do you handle the situation where an employee's effective tax rate actually goes DOWN when they work in certain states? Do you claw back the equalization payment, or do you just let them benefit from the favorable assignment? I'm particularly interested in hearing from anyone who has experience with employees working temporarily in states with no income tax (like Nevada or Wyoming) while being residents of high-tax states.

This is such a timely discussion! We've been grappling with similar challenges at our company. One thing I haven't seen mentioned yet is the coordination with workers' compensation insurance - we discovered that our WC carrier also needed to know which states our employees were working in, and there were some conflicts between how we were tracking for tax purposes versus WC purposes. Also, for anyone dealing with the New York convenience rule - be extra careful! NY considers remote work done for a NY employer to be NY-source income even if the employee is physically in another state. We had to implement special tracking just for our NY-based employees who travel elsewhere to make sure we're withholding correctly. Has anyone dealt with city-level taxes in this context? Places like NYC, Philadelphia, and San Francisco have their own income taxes on top of state taxes. We have a few employees who occasionally work in these cities and I'm not sure if we need to be withholding city taxes for short-term assignments.

Another thing to consider - if you're talking to banks for business loans specifically (not personal loans), they actually might want to see different numbers. When I applied for a small business loan, they wanted to see my business's total revenue (the total income line) AND the profit (ordinary business income). They used the revenue to gauge business size and the profit to assess profitability. Just something to keep in mind depending on what you're using these numbers for!

I just want to point out something that confused me at first - there's also the "gross receipts" line on the 1120-S which is different from both total income and ordinary business income. Gross receipts is literally ALL money coming in before ANY deductions, total income is after some adjustments, and ordinary business income is after most expenses. The IRS publication 542 explains this, but honestly it's super confusing to read. My accountant explained it like this: gross receipts = all money in, total income = money after cost of goods sold and a few other things, ordinary business income = your actual profit after regular business expenses.