Tax question (income, income tax, cost)

[new2colorado]

does anyone know the answer to this: my company paid to move me here-they took care of arranging the moving company and paying them....they estimated the cost at about 20k- which shows up on my paystub as relocation income-does this mean i have to pay federal income tax and state tax on this?

[TexaCo Mom]

It looks like it depends where/how it was reported on your W-2 whether it's included as wages or not.

Check out IRS publication 521 here: Publication 521 (2008), Moving Expenses Scroll about 2/3 of the page down and there's a chart that should help you determine how/where to report the reimbursement/expenses.

[broux00]

http://www.irs.gov/pub/irs-pdf/p521.pdf

This is a link to the IRS publication discussing moving expenses. Page 10 begins talking about reimbursement for moving expenses. Take a look at this and follow up with any additional questions - make sure to provide the necessary information.

It depends on a few things, but my first reaction is no. Although if the moving expenses were actually less than the reimbursement, than you would pay tax on the difference unless you gave the excess back to them.

[new2colorado]

thanks, i'm still confused though-i actually never received any money myself from my company-they contracted the moving company and paid them, i never even saw an invoice- i haven't gotten my w-2 yet, just got nervous that it says relocation income on my check stub and is figured in with the year to date income amount----hopefully i won't have to pay taxes on this amount because i know i could have actually moved for about 1/3 of this-what would be the benefit to my company by paying so much extra for moving someone? if i have to claim it as income-how would they benefit?---just trying to figure this out.

[broux00]

If it shows up on your W-2, just follow the table on page 11 of the link I posted. They paid it, so you wouldn't claim any income since you would have been able to deduct the expenses had you paid for them (provided you met the distance requirements). Since you didn't see any money, you wouldn't have to worry about giving excess reimbursement back.

[ColoWeb]

It depends on the way it was arranged and reported. If it is 20K in income and your move is 20K then, in the end, it should zero out. However, if they gave you 20K but your allowable expenses were only 15K, then the rest - 5K - can be classified as income and be taxable.

[Katarina Witt]

Hire a tax preparer. It doesn't cost as much as you might think, and it will be done correctly and legally. May save you money, too. Then when you are nominated for a position in the presidential administration, you won't have a "tax issue"!

[broux00]

Originally Posted by ColoWeb

However, if they gave you 20K but your allowable expenses were only 15K, then the rest - 5K - can be classified as income and be taxable.

Not an issue since n2c didn't receive any money - the company paid for the move directly.

[Sheridan1962]

Perhaps 20K was the grossed up amount (which would then already include taxes....)