UK to Chicago.. in a couple weeks!
Nov 10th 2017, 6:01 pm
#31
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Re: UK to Chicago.. in a couple weeks!
I negotiated 10k budget that I can expense. So any costs that I have, I can expense up to a 10k (cost to me) amount. So I guess the company will save whatever it can on that 10k that it can expense back. Does that make sense? I have 10k to play with. It's not like being given a 10k payment which would be taxed. I claim them as a "business expense".
Nov 10th 2017, 9:00 pm
#32
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Re: UK to Chicago.. in a couple weeks!
I negotiated 10k budget that I can expense. So any costs that I have, I can expense up to a 10k (cost to me) amount. So I guess the company will save whatever it can on that 10k that it can expense back. Does that make sense? I have 10k to play with. It's not like being given a 10k payment which would be taxed. I claim them as a "business expense".
I had exactly the same relocation "bonus". In that I had $10k allowance for relocation expenses that I would submit like any normal business expense and be reimbursed in my pay cheque. I used it for rent in the end.
You should be aware that as far as US tax law is concerned, when you are reimbursed for those expenses, that is taxable income, and you will be taxed on it.
Nov 10th 2017, 9:10 pm
#33
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Re: UK to Chicago.. in a couple weeks!
Hey,
I had exactly the same relocation "bonus". In that I had $10k allowance for relocation expenses that I would submit like any normal business expense and be reimbursed in my pay cheque. I used it for rent in the end.
You should be aware that as far as US tax law is concerned, when you are reimbursed for those expenses, that is taxable income, and you will be taxed on it.
I had exactly the same relocation "bonus". In that I had $10k allowance for relocation expenses that I would submit like any normal business expense and be reimbursed in my pay cheque. I used it for rent in the end.
You should be aware that as far as US tax law is concerned, when you are reimbursed for those expenses, that is taxable income, and you will be taxed on it.
https://www.nytimes.com/2017/11/10/y...T.nav=top-news
Last edited by Giantaxe; Nov 10th 2017 at 9:17 pm.
Nov 10th 2017, 9:11 pm
#34
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Re: UK to Chicago.. in a couple weeks!
Hey,
I had exactly the same relocation "bonus". In that I had $10k allowance for relocation expenses that I would submit like any normal business expense and be reimbursed in my pay cheque. I used it for rent in the end.
You should be aware that as far as US tax law is concerned, when you are reimbursed for those expenses, that is taxable income, and you will be taxed on it.
I had exactly the same relocation "bonus". In that I had $10k allowance for relocation expenses that I would submit like any normal business expense and be reimbursed in my pay cheque. I used it for rent in the end.
You should be aware that as far as US tax law is concerned, when you are reimbursed for those expenses, that is taxable income, and you will be taxed on it.
For example, say I was going to a customer site for a trip, I spend 300$ on a flight. I would then expense this and expect to be reimbursed 300$... if I was then tax'd on that amount, I would be getting less than I spent. Do you have any more information? Regardless, if this is the case - I'll hopefully argue my case in that I negotiated the ability of having 10k worth of budget, and not less. Thanks for the heads up.
Nov 10th 2017, 9:16 pm
#35
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Re: UK to Chicago.. in a couple weeks!
The key is that they are reimbursing you for relocation expenses, not business expenses. Google "gross up" for more info.
Nov 10th 2017, 9:22 pm
#37
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Re: UK to Chicago.. in a couple weeks!
Thinking about this further, would a year assignment not be classed as a business expense? I'm not relocating to be a permanent resident? Is this a ... grey area?
Nov 10th 2017, 9:28 pm
#38
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Re: UK to Chicago.. in a couple weeks!
The other thing to bear in mind is that whilst you will be taxed on the reimbursement of the relocation expenses, it won't be in the form of pay cheque deductions.
So, for example, in my case. I expensed $10k worth of shit. And I was reimbursed the full $10k post-tax. Like any ordinary business expense.
But because it;s a relocation expense, when i got that money I became tax liable for that extra $10k of income, and when I submit my tax return next year I'll have to list my income as my salary, plus that $10k of relocation expenses and pay tax on the full amount.
What you want to avoid is a situation where you expense your stuff, get the full amount back and then forget you'll need to pay some of that in tax months later when you submit your tax return.
Nov 10th 2017, 9:29 pm
#39
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Re: UK to Chicago.. in a couple weeks!
I see your employer hasn't relocated anyone internationally before so you may have to point them in the right direction. And many employers don't get the "gross up" right because they overlook that the "gross up" is itself taxable income.
Last edited by Giantaxe; Nov 10th 2017 at 9:34 pm.
Nov 10th 2017, 9:33 pm
#40
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Re: UK to Chicago.. in a couple weeks!
Nov 10th 2017, 10:37 pm
#42
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Re: UK to Chicago.. in a couple weeks!
Beware of looking for the "closest to the UK" as that may not be at all what you need. Coming from the UK with the "all you can eat buffet" model of health insurance, it can be hard to accept that most people don't need and won't benefit from insurance that covers all things under all circumstances. .... It would be like expecting your car insurance to cover the replacement of tyres, windscreen wipers, and oil changes.
In most cases it is likely to be better to take insurance that covers you for major issues, expensive drugs and therapies, hospitalization, and chronic conditions, and then pay for basic visits to the GP, antibiotics, and other minor expenses out of a tax-free Health Savings Account (HSA). But you need the right sort of insurance (high deductible) to be allowed to open an HSA. In the worst case scenario you could switch back to a regular policy no more than 12 months later during "annual enrollment".
The amount you can save on the premiums could be enough to pay for a visit to your GP and a prescription every month, and still save you money compared to a "traditonal" health insurance policy!
In most cases it is likely to be better to take insurance that covers you for major issues, expensive drugs and therapies, hospitalization, and chronic conditions, and then pay for basic visits to the GP, antibiotics, and other minor expenses out of a tax-free Health Savings Account (HSA). But you need the right sort of insurance (high deductible) to be allowed to open an HSA. In the worst case scenario you could switch back to a regular policy no more than 12 months later during "annual enrollment".
The amount you can save on the premiums could be enough to pay for a visit to your GP and a prescription every month, and still save you money compared to a "traditonal" health insurance policy!
I would never advise a person coming to the US for a year to take out a high deductible health plan with an HSA or HRA? You would likely not have enough money saved to cover the costs of the deductible if you do teak a leg or get a serious illness. Also, if the person does return to the US. What use is money in an HSA account that can only be used on qualifying healthcare expenses going to be to them? They would also have no easy way of repatriating the funds?
Possibly, bEtter to stick to a rich PPO plan and use network providers if the poster is used to paying $0 towards their healthcare - as in the U.K.
Nov 11th 2017, 12:14 am
#43
Joined: Dec 2001
Location: Dixie, ex UK
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Re: UK to Chicago.. in a couple weeks!
That said, I do agree that under the "one year contract" scenario, you would be financially exposed for most of the year, and if you left after one year you wouldn't be around to reap the benefits in subsequent years.
Last edited by Pulaski; Nov 11th 2017 at 12:45 am.
Nov 11th 2017, 1:10 am
#44
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Re: UK to Chicago.. in a couple weeks!
I wouldn't be so sure about that, although superficially that argument looks plausible. .... Our family deductible (which would required all three of us to have medical expenses exceeding 2,700 IIRC), is less than 12 times the difference between our monthly HD insurance premiums and the monthly premiums for "traditional" health insurance.
https://tax.thomsonreuters.com/check...cket-maximums/
Last edited by Giantaxe; Nov 11th 2017 at 1:13 am.
Nov 11th 2017, 10:25 am
#45
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Re: UK to Chicago.. in a couple weeks!
How does the tax year work? I'll only be receiving earnings in the UK tax year until December. But I'll be receiving payments for the US tax year for the month of December. I assume I file taxes etc for that year... I've had a look and it seems up to around 4500$ is tax free in the US. Is this correct?