5 Year-End Relocation Tax Errors—and How to Avoid Them
Year-end relocation processing can be a minefield of small oversights that lead to big headaches come January.
From missed gross-ups to outdated tax assumptions, the cost of a single mistake can ripple across W-2s, audits, employee trust, and your team’s stress levels.
At Orion Mobility, we work with companies to simplify and automate their year-end relocation processes. Along the way, we’ve seen where things often go wrong—and how to prevent them.
Here are 5 common errors we help our clients avoid every Q4.
1. Using W-4 Data Instead of 1040 Filing Status
The mistake: Using W-4 marital status and exemptions from payroll systems to calculate marginal tax gross-ups.
Why it matters: W-4 data often doesn’t reflect the transferee’s actual filing situation. This leads to under- or over-grossing, especially in high-salary relocations.
Best practice: Use the transferee’s 1040 filing status and exemption numbers, or verify directly if unclear. This aligns with what they’ll use on their tax return.
2. Forgetting the Six States That Still Allow Moving Expense Deductions
The mistake: Automatically grossing up moving expenses in states where they’re still deductible.
Which states?
Arkansas, California, Hawaii, New Jersey, New York, and Pennsylvania
Best practice: Ensure your relocation system excludes taxable gross-ups for eligible expenses in these states.
3. Not Auditing System Switch Settings
The mistake: Overlooking settings in your relocation software that may have been changed throughout the year.
Why it matters: A single switch error can affect final calculations—without you noticing until it’s too late.
Best practice: Do a full system audit before your final year-end reports and again before transmitting to payroll.
4. Failing to Check for Previously Reported Relocation Earnings
The mistake: Running year-to-date earnings reports without verifying if they include or exclude relocation earnings already reported to payroll.
Why it matters: This affects your gross-up base and starting point. It can lead to duplicate reporting or underpayment.
Best practice: Clarify with payroll exactly what’s been reported and adjust your data accordingly.
5. Misdated Expenses
The mistake: Entering January expenses with a previous year’s date—by habit or error.
Why it matters: These expenses are either missed completely or reported in the wrong tax year.
Best practice: Run audit reports focused on expense dates and correct any that were backdated unintentionally.
Orion Mobility Helps You Avoid These Errors
Orion’s gross-up engine and year-end tools are built to:
Validate tax filing status and apply accurate gross-ups
Automate state-by-state tax rule handling
Audit data and switch settings before final reports
Track previously reported earnings
Flag expense date anomalies before they’re finalized
Whether you manage 10 relocations or 1,000, our platform and team help you close the year accurately and confidently.
Ready to eliminate year-end relocation errors?
Let’s talk. Orion Mobility helps HR, finance, and mobility teams stay ahead of mistakes—and tax season surprises.