Tax Help
 

Hi I am unsure on an issue and would like some help.
Obviously its tax time and my employer is discussing tax on rlocation money they gave me.
Now I know I should have researched this but having moved people myself in the past and not ever encountering it I was surprised.
Situation is they paid half of money whilst I was still in UK and other half when I got here obviously 60% went on removal costs.
The balance on temporary housing in hotel, hire car etc.
What is liable under US tax laws and are there any loop holes here.

Re: Tax Help
 

Long ago you could write this off against moving costs but ONLY if you itemised.

Essentially, relocation money is taxable if paid directly to you. It's nothing more than extra salary. IF you itemise, you can write off moving expenses, whether or not you got relocation monies.

Re: Tax Help
 

Thanks snow bunny .

Re: Tax Help
 

Do remember that I am not a tax specialist and that I recommend that all people filing US taxes for the first time (or after a major major change like immigration) use a tax accountant.

Re: Tax Help
 

I am going to this advice is for my barney with work:thumbsup:

Re: Tax Help
 

Any recommendations for a tax prep for first time filers? Preferably in Chicago? Sorry to hijack there!
(Our relocation money was paid out here and taxed as salary. We're hoping to claim some of it back with the receipts we have for the various costs).

Re: Tax Help
 

Hold on - surely one can't deduct moving expenses if you've already been reimbursed by an employer? :confused: :confused: :confused:

Re: Tax Help
 

Correct. See here for IRS guidance on moving expenses.

Re: Tax Help
 

The point is you pay removal company x $7000.
Your employer pays you $7000 reimbursement.
Why the hell should you then cover a liability of tax on the $7000 which is not for profit?
In UK its non taxable below 6500 quid last time I moved someone, may have changed.
Therefore point is how is it deemed extra income?
My understanding is there is a system called gross up under which your firm can say you have a liability in tax of say $3000 they pay you that so your burden then in theory becomes tax on that $3000 not $3000 as a whole?

Re: Tax Help
 

You really have to read the fine print on this one .... whether or not the reimbursement was included as salary or fringe benefit, whether or not the plan is "accountable" -- incredible amounts of bullshit.

It's madness.

Re: Tax Help
 

When I moved and subsequently found out that there was a tax liability for these things I just "reminded" my company that they'd need to gross up payments so that I wasn't out of pocket. They did. I assumed this would be fairly standard for company-organized moves.

Re: Tax Help
 

Surely, as a part year person, you must itemize, I thought you have to be here for the whole year to use the standard deduction. It was that way years ago, I got stuck with finding $400, cash, the afternoon of my evening flight out, back when $400 was significant money.

Re: Tax Help
 

Yep thats gonna be my point but you still have to pay tax on the gross up.

Re: Tax Help
 

or get the company to stump the tax.

Re: Tax Help
 

Is relocation for international moves considered any different than relocation for an interstate move? I've been moved 3 times by three diff companies, and each time it was considered taxable income for us. I think it was also listed separately on my W-2. I believe we could only list relocation expenses that we paid out of pocket, without reimbursement from the company.