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We made a significant cross-country move last year for my spouse's job. Some, but not all, of the relocation expenses were provided by his company. We paid the rest out of pocket, I kept every receipt, and we were able to include the remainder of our moving costs as tax deductions this year.
However -- that is going away starting this year (2018), in the new tax law. Do you think that will impact anyone's plans to move, once this is fully realized?
We did things as cheaply as we could, but it was still not inexpensive to move our family. The net gain for us would have been worth it to still pay for the remainder of the relocation even if it hadn't been tax deductible, but I can see that it could an issue for others... especially those who get no relocation expenses or reimbursement from an employer.
1. Employers may find that no one will transfer without full reimbursement.
2. Others will just have to plan for it, just like those that have had their property tax deduction whacked.
I agree with #2, but wonder if it will limit some people who just pick up and try moving to a new area without a job in the hopes they'll land something quickly. (And that's not a criticism -- I did that once myself).
As to your first point, I wonder if employers will be more likely to take a closer look at (more) local candidates for positions.
And I agree with the point that it doesn't seem like a very critical tax deduction, so probably not a huge loss. I'm just curious about any potential impact.
1. Employers may find that no one will transfer without full reimbursement.
2. Others will just have to plan for it, just like those that have had their property tax deduction whacked.
Quote:
Originally Posted by BlessedLife
I agree with #2, but wonder if it will limit some people who just pick up and try moving to a new area without a job in the hopes they'll land something quickly. (And that's not a criticism -- I did that once myself).
As to your first point, I wonder if employers will be more likely to take a closer look at (more) local candidates for positions.
And I agree with the point that it doesn't seem like a very critical tax deduction, so probably not a huge loss. I'm just curious about any potential impact.
Re #1, I suspect employers will still consider either anyone willing to move themselves with no reimbursement or deduction; or offer some amount of reimbursement if that's what it takes to get the right candidate.
Re #2, re moving to a new area without a job, ISTM these are generally low-income folks whose expenses would be minimal, and the deduction would have only netted them a 10 or 12% saving.
FWIW, my last 2000 mile move was non-deductible. As a retiree, there was no job involved. (And it would have only saved me about $180).
Employers have been tossing up relo expenses while paying them as expense reimbursement for a long time. Depending on how you negotiate your contract you can include tax differential.
Re #1, I suspect employers will still consider either anyone willing to move themselves with no reimbursement or deduction; or offer some amount of reimbursement if that's what it takes to get the right candidate.
Re #2, re moving to a new area without a job, ISTM these are generally low-income folks whose expenses would be minimal, and the deduction would have only netted them a 10 or 12% saving.
FWIW, my last 2000 mile move was non-deductible. As a retiree, there was no job involved. (And it would have only saved me about $180).
Is this a guess or do you have stats to back it up? In any event, most low income folks don't pay any federal income taxes, much less have deductions high enough to warrant itemizing.
Itemizers were always a distinct minority of filers in the past. And since the std deduction has been doubled the bar for itemizing on fed taxes has been raised so even fewer people will do so.
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