Disclaimer acknowledgmentI know anyone answering or the Dope cannot be considered anything that even remotely resembles a tax professional, and can not be held responsible for my procrastinating ass, or if I fall into a hole and die if I choose to follow any advice given here./Disclaimer acknowledgment
I relocated from GA to CA in 2007, and the instructions for deducting relocation expenses that I received from the Relocation company used by my employer, combined with the instructions provided by the federal government make absolutely no fscking sense to me.
I’m waiting for an “informational booklet” to be emailed to me on the subject, but I figure I might get a nudge in the right direction here too.
My biggest problems…
A moving company was hired and paid for “on my behalf” by my employer. According to my relocation company, that money was not included in my W2 as income, and is considered “qualified” or “excludable”. Can I deduct it if it wasn’t included in my W2?
Can I deduct any of the expenses listed by the relocation company as “Non-Qualified (Taxable) Moving Expenses”?
Perhaps I should keep things more general…
Can I potentially deduct payments made both to me, and to third parties “on my behalf”, or just one of the two? If just one, which one?
Can I potentially deduct expenses that are both "Qualified (Excludable) and “Non-Qualified (Taxable)”, or just one of the two? If just one, which one?
I’m using TurboTax, but now they’re showing me as getting a refund that is significantly larger than the one I had calculated myself (based largely on how I’m filling in these relocation deduction sections) and as I’m not used to getting refunds at all, I’m assuming that I’m fsking things up.
From what you describe, I don’t think you should be filling out anything regarding these moving expenses. If the company picked up the tab, then you had no “expenses” - and are therefore, not entitled to any deduction.
If you had paid the moving company, then you would have incurred the expense, and you could claim the deduction.
But since the company picked up the tab, to you it is like a “gift” - you didn’t have any “expense”.
(Now if there were expenses involved with the move, like hotel, rental car, meals during transit, then you can claim these expenses).
Yeah, that was my initial hunch as well, but the more I read, the more I was led to believe that I could deduct something, somewhere.
There were travel expenses that I was reimbursed for, and “tax assistance” and lump sums and whatnot.
I’ve decided to file an extension and take the headache to H&R just to make sure. Even without the particular deductions in question, by all of my calculations and estimates I’m due refunds from the Feds and from GA and CA as well. So I don’t have to send any payments today. The professionals can figure out exactly how much I’m getting back from whom.
I relocated from San Jose to San Diego in '96 as a result of company downsizing. The company paid all my moving expenses, plus a $6,000 lump sum. I didn’t have to pay taxes on any of it.
I relocated from San Diego back to San Jose in '06, this time for a new job. I deducted every single penny of my moving expenses, including meals en route. Uncle Sam didn’t bat an eye.
There were areas of the “relocation cloud” (as I’m now referring to it), that were included on my W2s, that I am being taxed for. The relocation service seems to have broken down the cloud in various ways except ways that make it easy to determine how much of the total cloud is included on my W2s, and how much of that amount is potentially deductable.
I’ve gone through this as one who moved and as one who maintained records on behalf of relocated employees. IANAExpert or anything, though, and it’s been a few years.
Your description confuses me – WHAT, exactly, did your employer pay this relocation company to do for you?
Why would you deduct any kind of expense that you didn’t actually, personally, incur?
If the company paid it on your behalf (either by paying a vendor, OR by reimbursing you), then THEY are categorizing it as a business expense.
I don’t think you’re ever allowed to deduct a reimbursed expense, because you’re not out the money.
OTOH, why would your employer pay this company to do things for you that your employer couldn’t categorize as a typical business expense? It seems like that would be discussed in advance - at least, the people I worked for were persnickety about that kind of thing.
If your employer can’t categorize an item as a legitimate moving expense (because it falls outside the IRS definition of what’s allowed) and therefore has to call it an “employee benefit” and you have to report it as “income”, then does it make sense that YOU are allowed to deduct it as a legitimate moving expense?
I don’t think the IRS has one set of rules for companies and another for individuals, but I could be wrong.
If you’re actually talking about house purchasing or closing costs, rather than the move, then I have no clue, I stayed away from those transactions.
The basics of what’s allowable are right here:
eta - I see a cloud. Your HR people may well know enough to help you - at least they can explain why THEY didn’t deduct those expenses. I’d bet you’re in “it’s income, pay up” territory, too.