Relocation allowance tax
#1
Just Joined
Thread Starter
Joined: Jul 2017
Posts: 8
Relocation allowance tax
Hi,
I'm in the process of relocating back to the US via an inter-company transfer. My official start date/move to US payroll is January 1st. I will be going to the US in December and will spend time getting a house etc. Next week the company is transferring a relocation allowance lump sum into my US bank account and they've said that it will be taxed at source before it's paid to me.
I'm a bit confused as to how exactly they will tax this at source. How will they calculate the rate of tax? Will they also deduct Social and Medicare? Does this mean that I'll effectively be on the payroll from next week meaning I'll need to submit a US tax return for 2017?
Any advice is greatly appreciated.
Thanks!
I'm in the process of relocating back to the US via an inter-company transfer. My official start date/move to US payroll is January 1st. I will be going to the US in December and will spend time getting a house etc. Next week the company is transferring a relocation allowance lump sum into my US bank account and they've said that it will be taxed at source before it's paid to me.
I'm a bit confused as to how exactly they will tax this at source. How will they calculate the rate of tax? Will they also deduct Social and Medicare? Does this mean that I'll effectively be on the payroll from next week meaning I'll need to submit a US tax return for 2017?
Any advice is greatly appreciated.
Thanks!
#2
Lost in BE Cyberspace
Joined: May 2010
Location: San Diego, California
Posts: 9,660
Re: Relocation allowance tax
They'll deduct tax starting with your first pay check in January I would expect.
Yes, they will deduct Social Security and Medicare payments.
Yes, they will deduct Social Security and Medicare payments.
#3
BE Enthusiast
Joined: Nov 2012
Posts: 902
Re: Relocation allowance tax
Why did you not negotiate that it should be grossed up?
#4
Just Joined
Thread Starter
Joined: Jul 2017
Posts: 8
Re: Relocation allowance tax
They've spent a lot and it seemed a step too far!
I still don't really get why I need to submit a tax return and pay medicare/social etc. when my end date in the UK isn't until December 31st and my start date is January 1st. It's not like I've been in the country and benefiting from anything.
I still don't really get why I need to submit a tax return and pay medicare/social etc. when my end date in the UK isn't until December 31st and my start date is January 1st. It's not like I've been in the country and benefiting from anything.
#5
BE Forum Addict
Joined: Aug 2013
Location: Athens GA
Posts: 2,134
Re: Relocation allowance tax
They've spent a lot and it seemed a step too far!
I still don't really get why I need to submit a tax return and pay medicare/social etc. when my end date in the UK isn't until December 31st and my start date is January 1st. It's not like I've been in the country and benefiting from anything.
I still don't really get why I need to submit a tax return and pay medicare/social etc. when my end date in the UK isn't until December 31st and my start date is January 1st. It's not like I've been in the country and benefiting from anything.
#6
Re: Relocation allowance tax
is that what they said to you, or is that British reserve on your part? If the latter, then you need to get tough and go and ask! What maybe considered pushy behaviour in the UK is normal in the US, and it won't be held against you if you ask, in an assertive and professional manner.
Short answer, because it's income and the governments on both sides of the Atlantic tax people's income.
Long answer - I hope as part of your relocation your company is offering assistance with tax returns (in both countries for transition years)!
Long answer - I hope as part of your relocation your company is offering assistance with tax returns (in both countries for transition years)!
#7
Re: Relocation allowance tax
+1 for asking it to be grossed up. They may well be waiting for you to ask for it. Don't ask, don't get and in the grand scheme of the costs of relocating, it isn't a huge amount but it will make a difference to you.
#8
Re: Relocation allowance tax
They've spent a lot and it seemed a step too far!
I still don't really get why I need to submit a tax return and pay medicare/social etc. when my end date in the UK isn't until December 31st and my start date is January 1st. It's not like I've been in the country and benefiting from anything.
I still don't really get why I need to submit a tax return and pay medicare/social etc. when my end date in the UK isn't until December 31st and my start date is January 1st. It's not like I've been in the country and benefiting from anything.
#9
Forum Regular
Joined: Mar 2013
Posts: 111
Re: Relocation allowance tax
Hi,
I'm in the process of relocating back to the US via an inter-company transfer. My official start date/move to US payroll is January 1st. I will be going to the US in December and will spend time getting a house etc. Next week the company is transferring a relocation allowance lump sum into my US bank account and they've said that it will be taxed at source before it's paid to me.
I'm a bit confused as to how exactly they will tax this at source. How will they calculate the rate of tax? Will they also deduct Social and Medicare? Does this mean that I'll effectively be on the payroll from next week meaning I'll need to submit a US tax return for 2017?
Any advice is greatly appreciated.
Thanks!
I'm in the process of relocating back to the US via an inter-company transfer. My official start date/move to US payroll is January 1st. I will be going to the US in December and will spend time getting a house etc. Next week the company is transferring a relocation allowance lump sum into my US bank account and they've said that it will be taxed at source before it's paid to me.
I'm a bit confused as to how exactly they will tax this at source. How will they calculate the rate of tax? Will they also deduct Social and Medicare? Does this mean that I'll effectively be on the payroll from next week meaning I'll need to submit a US tax return for 2017?
Any advice is greatly appreciated.
Thanks!