Jean Claude, I see you've gotten some great advice already! Just wanted to add one more perspective since I work in payroll and see these Box 18/19/20 issues frequently. When Box 18 has an amount but 19 and 20 are empty, it's often because your employer's payroll system is set up to report local wages for informational purposes but doesn't actually withhold the local tax - either because it's not required to be withheld at source, or because there was a setup error. For Philadelphia specifically (since you mentioned working there), the city requires employers to withhold the local wage tax, so if Box 19 is truly empty, that's likely an employer error. You should definitely contact your payroll department to get this corrected, as you'll want proper withholding going forward. In the meantime, for your current filing, "Philadelphia" or "PHILADELPHIA CITY" should work in Box 20. Most tax software will accept either format. And yes, you'll likely owe the local tax that wasn't withheld, but at least you'll know for next year! Hope this helps clarify things from the employer side of the equation!

Just wanted to chime in with another angle that might be helpful - if you're working with tax software that's giving you trouble with the locality field, you might want to try switching to a different software temporarily just to see how they handle this issue. I had a similar situation last year where TurboTax kept rejecting my locality entry, but when I tried the same information in FreeTaxUSA, it went through without any issues. Sometimes different software packages have different validation rules for local tax fields. Also, if you're really stuck on what to enter for Box 20, you can always call your city's tax office directly. Most local tax departments are actually pretty helpful during tax season and can tell you exactly what format they expect to see on returns. For Philadelphia, their tax office might even be able to confirm whether your employer should have been withholding or if you're responsible for paying the full amount when filing. One last tip - if this ends up being an employer error and you get it sorted out, ask your payroll department to send a memo to all employees explaining the local tax setup. You're probably not the only person dealing with this confusion!

Has anyone used TurboTax Business to file their final S-Corp return? Wondering if it handles all the dissolution specifics properly or if I should use a CPA for the final year.

One thing I'd add is to make sure you handle any depreciation recapture properly when distributing those laptops to yourself. If you claimed depreciation on them over the years, you'll need to calculate the recapture amount and include it in your final tax calculations. The fair market value of the laptops when distributed minus their adjusted basis could result in ordinary income treatment for the depreciation portion. Also, since you mentioned this is your first business closure, consider keeping all your corporate records for at least 7 years after dissolution. The IRS can still audit closed corporations, and you'll want documentation of how you handled the final distributions, asset valuations, and dissolution process. Better to have the paperwork and not need it than the other way around!

The 1099-K threshold changing to $600 for 2024 is going to be a nightmare for casual sellers! I've heard people say they're going to stop selling online altogether because of it. Does anyone know if there's a difference between selling on eBay vs local cash sales through Facebook Marketplace? Like if I sell stuff locally for cash does that somehow avoid all this tax reporting headache?

This is exactly why I keep detailed records of everything I sell online, even though it's a pain. I use a simple Google Sheet with columns for: item description, original purchase price/date, sale price, sale date, and whether it was personal or business. For personal items I can't remember the exact purchase price for, I research what similar items cost when I would have bought them and use that as a reasonable estimate. The key is being consistent and reasonable - the IRS isn't expecting you to remember that you paid $23.47 for a shirt in 2019, but they do want to see that you made a good faith effort to establish your basis. One thing that helped me was going through old credit card and bank statements to find purchases for higher-value items I sold. Most banks let you download several years of transaction history, and searching for store names or amounts can help you piece together purchase records you thought were lost forever.

Something important that nobody has mentioned yet - if you're sending money to family overseas, there are FBAR reporting requirements if the total amounts get large enough. My uncle got hit with a huge penalty for helping cousins in another country because he didn't know he had to file an FBAR form when the total exceeded $10,000 in a year. Different rules apply to international transfers versus domestic ones. Just something to keep in mind if any of your friends/family are outside the US!

Just want to throw this out there - I've sent thousands to my parents and siblings over the years through Zelle and Venmo and never had an issue. It's never been questioned in an audit (yes, I was audited once but for completely unrelated reasons). The IRS cares about taxable income, not personal transfers. As long as you're not trying to hide income by making it look like personal transfers, you're good. They're looking for the big tax evaders, not people helping their families.

Slight tangent, but is anyone familiar with qualified personal residence trusts (QPRTs)? I've been told they can be good for estate tax purposes while still letting you live in your home. But I'm not clear on how the mortgage interest deduction works with them.

One thing to consider that hasn't been fully addressed - if you do set up an irrevocable grantor trust, make sure your tax preparer understands how to handle the reporting. I made this mistake my first year after setting up the trust. Even though it's a grantor trust and the mortgage interest flows through to your personal return, there are still some filing requirements for the trust itself (like getting an EIN and potentially filing Form 1041 depending on the trust's income). My original tax preparer wasn't familiar with grantor trust rules and almost filed everything incorrectly. I'd strongly recommend finding a CPA or tax professional who has experience with trust taxation before you make the transfer. The last thing you want is to set up the trust correctly but then mess up the tax filings and lose your deduction anyway due to reporting errors.