Don't forget about potential foreign exchange implications! If you're sending USD to a foreign sub that operates in another currency, you'll need to account for forex gains/losses on those intercompany loans. This can get messy depending on the functional currency of each entity and how often exchange rates fluctuate.

One thing I haven't seen mentioned yet is the importance of considering your state tax implications as well. Many states have their own rules around intercompany transactions and transfer pricing that don't always align with federal treatment. For example, some states require separate accounting for intercompany interest income/expense, and others have specific addback requirements that could affect your state tax liability. California and New York are particularly aggressive in this area. Also, since you mentioned this is your first time dealing with international tax at scale, I'd strongly recommend getting a transfer pricing study done by a qualified professional if your transaction volumes are significant. The IRS has been increasingly focused on intercompany pricing audits, especially for tech companies with IP development across multiple jurisdictions. Having proper documentation upfront is much cheaper than trying to reconstruct it during an audit.

I went through almost the exact same situation last year! My company's payroll system automatically switched my state tax withholding when they temporarily moved me to a different cost center, even though I never actually relocated. Here's what I learned from my experience: Don't wait for your payroll department to fix this - they probably won't, especially if it's outsourced. The fastest path is to handle it yourself through tax filings. You'll definitely want to file in both states. In your home state, report all income as earned there. For the state where taxes were incorrectly withheld, file a non-resident return showing zero income actually earned in that state. Most tax software can handle this multi-state situation pretty easily. The key is having good documentation. Save any emails about the reassignment error, your actual work schedules showing you were at your home location, and anything that proves this was a payroll mistake. I attached a simple one-page letter with my non-resident return explaining the error, and it made the process much smoother. It took about 8 weeks to get my refund, but I recovered every dollar that was incorrectly withheld. The states deal with these payroll errors all the time, so don't stress too much about it. Just be thorough with your documentation and clear in your explanation of what happened.

I work for a CPA firm and we see this exact situation several times a year. The good news is that it's completely fixable, and you have multiple options depending on how cooperative your payroll company is. First option (cleanest): Push harder for a W-2C from your payroll company. The person telling you they "can't make changes after W-2s are issued" is either misinformed or trying to avoid the work. W-2C forms exist specifically for this purpose. Ask to speak with a supervisor and reference IRS Publication 15-A, which clearly states that employers must correct W-2s when there are errors in state tax allocation. Second option (if W-2C isn't possible): File in both states as others have mentioned. Your home state gets all the income reported, and you file a non-resident return in the wrong state claiming zero income earned there. Include a brief explanation letter with documentation of the payroll error. Pro tip: If you're using tax software, most major programs (TurboTax, H&R Block, etc.) have specific workflows for handling incorrect state tax withholding due to payroll errors. Look for "multi-state filing" or "payroll error correction" in the help sections. The key is acting quickly since you're approaching filing deadlines. Don't let the payroll company drag this out past April 15th, as that could complicate things unnecessarily.

Anyone know if there's a difference in how this tax code works in Scotland? I'm moving to Edinburgh next month but my job contract mentions 1242L.

This is really helpful - I'm in a similar situation as the original poster! I just want to add that it's worth checking if your employer offers any salary sacrifice schemes (like cycle to work, pension contributions, or childcare vouchers) as these can actually reduce your taxable income and potentially save you money. With the 1242L code, any salary sacrifice contributions get deducted before tax is calculated, which means you pay less income tax and National Insurance. For example, if you sacrifice £100 per month for pension contributions, that's £100 less of your salary that gets taxed. It's definitely worth asking HR about these options when you start your new job, as they can make a real difference to your take-home pay beyond just understanding your tax code.

Has anyone actually gone through this with Fidelity HSA? Their investment platform seems especially complicated for figuring out the earnings on excess contributions.

I dealt with this exact situation last year with my HSA through Bank of America. The key thing that helped me was creating a detailed spreadsheet tracking my contributions by date and the corresponding investment performance for each batch. What I did was go back through my HSA statements and identify exactly when I made the excess contribution (let's say it was my last $500 contribution in November). Then I tracked how my investments performed from that date forward until I discovered the issue. The pro-rata method others mentioned is correct, but I found it helpful to also document everything step-by-step in case the IRS ever questions it. I kept screenshots of my account balances, contribution dates, and the final calculation. One tip: when you call your HSA provider, specifically use the phrase "return of excess contributions with net income attributable" - this is the exact terminology they need to hear to process it correctly for tax reporting purposes. Don't let them just process it as a regular distribution or you'll get hit with taxes and penalties you shouldn't owe. The whole process took about 3 weeks from calculation to getting the money back, but it was worth doing it right to avoid tax headaches later.

Has anyone tried creating an informal entity like "Smith Family Rentals" and using that on the platform instead? Our accountant suggested that approach for our vacation rental, and the platform accepted it even though it's not an actual legal entity. Then we just split everything 50/50 on our individual returns with explanation statements.

I'm dealing with almost the exact same situation! My spouse and I co-own a rental property that we inherited, and we've been getting conflicting advice about whether we need to form a partnership or can just handle it as co-owners. From what I've researched, the IRS Publication 541 specifically addresses this. It states that "a joint undertaking merely to share expenses does not create a partnership." Since you're just collecting rent and sharing expenses (not providing substantial services like property management beyond basic maintenance), you should qualify for simple co-ownership treatment. The approach that @MoonlightSonata described sounds solid - having one person report the full 1099-K income then deducting the co-owner's share as an expense. This way the numbers match exactly what the IRS receives from the platform, but each owner only pays tax on their actual share. One thing to consider: make sure you keep detailed records of how expenses are split and document your ownership agreement somewhere (even if it's just an informal written agreement between you and your sister). This will be helpful if the IRS ever has questions about the arrangement. Have you considered asking the rental platform if they can at least put both names on the account, even if the 1099-K can only go to one person? That might help establish the co-ownership paper trail.