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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Optimize Moving Package
Expert: Carole Dunton - 10/31/2009
Question
I am being relocated across the country and have been given a generous moving budget. I can cash out some or all. I see 3 kinds of expenses for moving:
Type 1 Expense. Company can pay without reporting as income and I get no tax deduction (i.e. They can directly pay selling commision on my house).
Question: Any other expenses of this type?
Type 2 Expense. Company can pay without reporting as income, but I can pay myself and deduct (i.e. moving and packing of goods).
Question: If there any advantage, other than paperwork savings, to have the company pay the movers directly. Company movers are $1.50/lb and I found some that were closer to $1.00/lb. Relocation company says it is better to go through them for tax reasons since I do not pay tax on the tax gross-up for this, but I think it is a wash with the tax deduction.
Type 3. Company can pay, but it counts as income (i.e. Pay for 30 days apartment).
If it counts as income anyways, any reason not to cash it out? I think I can spend the money more efficiently than the moving company and I keep what I save.
Bonus Question: I can cash out some in 2009 and some in 2010? Does this seem like a good idea so I do not end up inflating my income too high in 2010 and lose deductions and credits?
Regards,
Dean
Answer
Hi,
If the income is reported to you and you take the moving expense adjustment to income, you can only deduct the cost of moving you and your family and your belongings and overnight stops along the way. You cannot deduct the real estate commissions on the sale of your home. If your company pays the real estate commissions on the sale of your home it would be included in your income and be taxable.
It would probably be better for you to split it between 2009 and 2010 to level out the extra income.
Regards,
Carole
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