Tax question: relocation expenses

[lil mermaid]

I am hoping that someone knows a little bit about this stuff. All of our tax information is with the accountant now, and we won't have access to the guy for a few days. I am really concerned that we may end up owing money...so if anyone can shed some light it would be greatly appreciated.

DH and I moved across the country at the end of 2002 for his job. His company paid for our relocation, among other things. I have a few questions about the tax implications.

1. Some of the expenses were paid by us up front, and the company reimbursed us for them. They were added to the income on his W2 and were in a specific block (number escapes me right now.) I know that we can deduct these expenses and we have all the receipts, backup , etc.

2. Most of the expenses were paid directly to others on his behalf, and were added to the income on his W2 (but not broken out seperately.) These items consisted of transporting our vehicles, our household goods, etc. and were paid directly to the companies who did the work. Are we able to deduct these expenses as well??? I am hoping that we can - its like $20k. They paid for points when we purchased our new home, but I know those can be deducted from our taxes so are essentially a wash.

All of the expenses that I am talking about here are on his 2003 w2. We didn't deduct anything in 2002.

BTW - we definitely do meet the time and distance tests.

 

[lil mermaid]

I hate to bump my own thread...but I had to!!!

 

[Bob Slydell]

It depends on whether its an accountable or non-accountable reimbursement plan. If it's accountable, then his employer should have taken withholding taxes out of the moving expense amount added to his W2. If it's non-accountable, then any expenses they added to his W2 should be deductible, assuming it's a qualified moving expense.

http://www.irs.gov/publications/p521/ar02.html#d0e1044

 

[kadaten]

I'm not an accountant, so take this just as one person's advice, but I have done my own taxes for 12 years and we've moved 5 times.

As I understand it, you cannot deduct any moving expenses that were reimbursed.

I assume they were in box 12 of your W-2, and were coded P, which is "excludable moving expense reimbursements paid directly to employee (not included in boxes1, 2, or 5)".

This would mean that money was paid to you, but is not taxable, so when your tax preparer puts your income on your form, it will not be included. It was not taxable income, it was reimbursements.

So, if you made $50K last year and had $20K reimbursed in moving expenses, box 1 should say $50K and box 12 should say $20K. Only the $50K goes on your tax forms as income.

NOW....if you have receipts for more than you were reimbursed (it cost you a total of $21K but you only got $20K in reimbursements), then you can deduct that ($1K) if you itemize deductions.

Hope this helps somewhat....

 

[AirForceRocks]

The only time I moved and was able to deduct the expenses was prior to coming in the military. I was not reimbursed for the move by my company, so I was able to deduct all of my expenses.

When we PCSed from Alabama, we did a DITY move, and ended up being taxed on a good portion of what the AF paid us for the move. We had about $1500 in moving expenses and they paid us almost $4000, so we were taxed on the additional $2500.

 

[JustHolly]

We just did our taxes last night on TurboTax. We did not itemize deductions, and we still got some money back in our tax return for moving expenses.

It asked for the total of all moving expenses.... supplies, movers, transportation, lodging. It asked for a dollar amount.

The next question asked "How much of this have you been reimbursed for?" and a dollar amount was required. We entered "0" because we didn't get reimbursed.

It ended up giving us another $400 when our moving expenses (ones we had receipts for) was 1600. That looks like 25%. 25% of $20,000 is a lot of money!

 

[AirForceRocks]

That looks like 25%. 25% of $20,000 is a lot of money!

But if they were reimbursed for the $20,000 would they still get to take the deduction?

 

[lil mermaid]

We tried to do our own taxes on Turbo tax (like we always do) - but turbo tax takes a very simplistic view of this type of situation so we decided to take the taxes to a pro.

We had some expenses that were reimbursed - those were seperated out on the W2 (I think Box 12C??) We were able to figure out what to do with those using Turbo Tax.

The rest of the items were not reiumbursed, i.e., they were paid directly to someone else. They are showing on Box 1 (with the income.) We have a huge long statement to go along with it.

ALL of our moving expenses were either paid for by the company directly, or we paid for them and were reimbursed.

Bob Slydell - is it possible for an employer to have both kinds of plans at once???

If we have to pay taxes on this money...well, to put it bluntly, we are screwed!

Edited to add, thanks for all of your input!

 

[Tina]

If your employer increased your DH's wages by the amount of the moving expense they paid, you can deduct the expenses. We had the exact same situation a few years ago.