It is no small source of irritation to me that the TCJA passed by the Congress leaves the deduction of moving expenses untouched for corporations/employers, but now requires the taxpayer to have to pay federal, state and FICA taxes on this benefit. I could understand this provision if an individual's income is over a certain threshold, as many other benefits are subject to, but this does not have any such limitation as far as I am aware. I have a client whose income supporting a family of four is under $80K, and has moving expenses of $7,500+ which he must now pay taxes on in addition to his salary. With the elimination of exemptions, he is hardly ahead of the game with the increase in the standard deduction. In fact, he is going to be less well off than last year, all other things being equal. Please correct me if I am wrong.
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While that sounds correct, I guess I've never really understood why the Moving Expense Deduction existed in the first place. I don't understand why the Federal Government would want to subsidize the cost of somebody moving, even if the move was for work.
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Your family of four making under $80K was not really the target of the primary tax breaks in TCJA, so it's not surprising at all that he's not seeing a benefit."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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I agree. It was solely for corps and the most wealthy. In the case stated above, the employer is paying/'reimbursing the taxpayer's moving expenses as an incentive to take the job in another state, but while they get the deduction, he has to pay FIT/SIT/FICA taxes on it to the tune of around 25%Originally posted by Rapid Robert View PostComment
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