Moving Expense Reimbursement

[gman]

Taxpayer was relocated by employer-150 mile difference. Employer remibursement included in w-2, 6000.00 box 1. Must form 3903 be filed?

[okie1tax]

Moving Expense Reimbursement

If employee has valid moving expenses, mileage for vehicle, van/truck to move, packing materials, etc., can deduct those from income. That is why you would want to file the 3903.

[FEDUKE404]

Look around the TTB boards

There has been a recent discussion here on this same topic.

Some employers pay more (fringe benefit) than what the IRS allows as a legitimate moving expense, and thus taxable income for the employee is generated.

Check the code on the W2 for more info.

Bottom line: If the employer has included moving expenses as income, then you certainly should lower that income by filing Form 3903. But don't necessarily expect all of the reimbursed moving expenses to disappear.

Of course, there is no reason you "must" file a Form 3903. . . . . .

FE

[gman]

Miscellaneous Allowance

of 5,000.00 is included in the moving breakdown of the expenses and included in his w-2. Would that be included on the 3903? I don't think it would, but could use some input.

thanks

[okie1tax]

Moving Expense

Expenses to ship/transport household goods, move vehicle, etc. If you have a breakout, it should show the deductible expenses, those are the ones you show on the 3903 as reimbursed. The non-deductible items ARE properly included as income.

[taxmom34]

you just put the moving expenses that client has on form 3903 and transfered to adjustments on 1040. so even if he was reimbursed it just reduces his taxable income. so it's possible he would not erase all of the reimbursement but it's best for client to eliminate some taxable income

[Burke]

of 5,000.00 is included in the moving breakdown of the expenses and included in his w-2. Would that be included on the 3903? I don't think it would, but could use some input.
thanks

You do not include non-eligible moving expenses on the 3903. The form is pretty clear as to what goes on what lines. The $5K moving "allowance" is not likely deductible. That is usually just a lump sum to cover all sorts of expenses the employee may have that cannot be written off. It is treated just like a bonus, and is already in his W-2, Box 1.

[taxitc]

Moving Problems.

You do not include non-eligible moving expenses on the 3903. The form is pretty clear as to what goes on what lines. The $5K moving "allowance" is not likely deductible. That is usually just a lump sum to cover all sorts of expenses the employee may have that cannot be written off. It is treated just like a bonus, and is already in his W-2, Box 1.

How about this situation. Client receives a moving re-imbursement check for $10,000.00.
It is included in w-2 wages WITH withholding taxes (Federal, State, Fica, Medicare taxes).
The check was written in 08-05-2011. She has expenses so far in the move amounting to
only $2,000.00. She still has her house (unsold) with the majority of furnishing still in it.
Shows better. The final move will not occur until the house is sold. Hopefully this spring.
What ideas does anyone have to handle this situation. What happened to the way of company just pays for the moving expenses? Done deal. Everyone is happy?

[Burke]

What are the $2K in moving expense she has already incurred? The W-2 income is correct. If the "move" has already occurred, and she is living and working in her new location, then she meets the one year test. If she hasn't, she has one year to do so and deduct eligible moving expenses. Don't look a gift horse in the mouth. She got paid $10K.

[taxitc]

Moving Problems.

Isn't there an annual exclusion on gifts before a gift tax returns is due. Back to a serious moment- Her current moving expenses included paying a moving company $900+ bucks to move a Baby Grand piano, several u-haul trips to move small items needed here,etc.The
big move will be in 2012. Meanwhile- she will owe taxes on 8K. Something is wrong with this picture. In this economy, moving to retain employment, relocation troubles, leaving ones home -etc. and being re-imbursment isn't called a "gift horse" donation. Sorry for sounding off. Just want to know how to handle it properly.

[Burke]

Sounds like you have handled it correctly. In years past, the IRS allowed a lot more things as eligible moving expenses, including costs of travel for househunting, and expenses incurred in the sale and purchase of a home, etc., etc. However, that was changed by Congress a while back and now it is pretty much transportation of household goods, maybe mileage or shipping of autos, and storage of HH goods for a limited period of time. Her employer sounds generous and is giving her a complete relocation package, it seems. But she can still only deduct the limited eligible expenses on her tax return. When she does the "big move" in 2012, she may be able to deduct the cost of transporting the rest of her household goods in this year.

[BP.]

Meanwhile- she will owe taxes on 8K. Something is wrong with this picture.

The employer relo pkgs I've seen have also included a gross up calculation in the employee's wages & withholding to cover the scenario you have described. (Having to cover the taxes on the add't income.) Maybe your client has had a gross up?

[taxitc]

Sounds like you have handled it correctly. In years past, the IRS allowed a lot more things as eligible moving expenses, including costs of travel for househunting, and expenses incurred in the sale and purchase of a home, etc., etc. However, that was changed by Congress a while back and now it is pretty much transportation of household goods, maybe mileage or shipping of autos, and storage of HH goods for a limited period of time. Her employer sounds generous and is giving her a complete relocation package, it seems. But she can still only deduct the limited eligible expenses on her tax return. When she does the "big move" in 2012, she may be able to deduct the cost of transporting the rest of her household goods in this year.

Thank you Burke.