How to file taxes on relocation expenses paid by employer?

Question

In October 2012, I received a new job and moved from Chicago to Dallas. My new employer paid my relocation expenses but I'm not sure how to file for everything for taxes. My relocation package included them packing and moving all of my items from one apartment to another. They also gave me a lump sum to cover all other costs. There honestly weren't many costs that we needed to use that towards since we only had the mileage of driving down (about 950 miles). When I received my W2 from my new employer, all of the expenses and lump sum that was paid for my relocation appears in box 1. There is nothing in box 12 related to this. The relocation company also provide a breakdown of everything they were involved with. This goes as follows:

Excludable (box 12 code P) = $0
Business Excludable (not reported on W2) = $5,674.39

Taxable - grossed up non-deductable = $6,200
Taxable - not grossed up = $2,000
Taxable - grossed-up deductable = $0

They then list the tax withholding, tax assistance, and tax total for federal income tax, state income tax, local income/special tax, social security tax, and medicare tax. There are values for all but the state income tax and local income/special tax and my guess is because Texas doesn't have a state income tax.

I typically file my own taxes but I'm wondering if its worth the hassle this year. I'd prefer to still do my own so based on the feedback I get here will help determine that. I know I'd have to do the 3903 form but I'm not quite sure what values to enter in there since I've never had to deal with moving expenses before.

Answer 1

Was the lump sum amount the 2000 that is listed as taxable not grossed up for this purpose and time in your life. If that is what it is then you would have to use the form 3903 to see if any of the 2000 amount will have to be added to the line 7 of your 1040 income tax return for this purpose and time in your life.

Hope that you find the above enclosed information useful. 03/31/2013

Answer 2

So you are being reimbursed for your relocation expenses by submitting your receipts to your employer. Your company may also have paid for your spouse to relocate. Great, none of this is taxable. However no one else can use those receipts for any kind of deduction. If your wife or father-in-law think otherwise, they are mistaken. If your wife wants a deduction for moving, she needs unreimbursed expenses of her own that qualify for the deduction. How or if the IRS finds out about your father-in-law's taxes is not an issue for you. However, if your wife is getting involved in doing a shady tax return, and you know about it, you need to do your best to convince her not to do it, and not file a tax return with her if there is anything fishy on a joint tax return. It appears you need to be more vigilant about letting your information get to your father-in-law. In particular, don't let him do your taxes or have access to your income documents.

Answer 3

Most likely the $5,674.39 was the cost of moving your household goods and and was not included in box 1 of your W2. If that is the case then the entry on Line 1 of the 3903 is 0. If the cost of actually moving your household goods was included in box 1 of the W2 then that that cost goes on Line 1 of the 3903.



Line 2 of the 3903 gets the cost of travel from Chicago to Dallas for you and your family. You can take actual gas cost plus tolls or $0.23 per mile. Include lodging costs but not meals.

Answer 4

your W-2 will include the taxable portion of your relocating expenses the employer claims as your income obviously the $8200

if you were given an additional allowance which would be taxable, you can claim any moving expenses you paid out of that money for the move

and it relates to MOVING expenses

Answer 5

It's taxed as regular income. Anything your employer gives you is taxable, unless they were merely reimbursing you.