Moscow, ID asked in Tax Law for Idaho

Q: Moving expenses to report

I recently moved about 2000 miles for job. The new employer reimbursed me about $1900 for the total moving expenses. However, only $950 was shown as moving expenses reimbursed on my paycheck and W2. Now, on that particular pay period they taxed much more because $950 was added to my income. So, now my question is:

How much should I report as moving expenses and moving expenses reimbursed? $1900? Or, $950?

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1 Lawyer Answer
Matthew M Montoya
Matthew M Montoya
  • Tax Law Lawyer
  • Lone Tree, CO

A: This question gets a little tricky and depends on an employer's policies. To figure out whether reimbursed moving expenses were taxable in the first place, you're going to need to refer to IRS publication 521. If an employer repaid an employee according to what's called an "accountable plan," (where you properly account for, document, and report your expenses to your employer), then they would report the amount on Box 12 of your W-2. In this case, it is NOT taxable to the taxpayer. However, if the reimbursement isn't part of an accountable plan (including flat per-diem where the business doesn't require you to report expenses), then it IS taxable to the taxpayer.

If the employer included the reimbursement as income, taxpayers can simply claim your moving expenses as an adjustment to income. As always, taxpayers must have appropriate receipts, invoices, etc. to prove each entry. Fortunately, taxpayers don't need to itemize to claim these kinds of expenses.

However, this is a bit of a broad overview of expenses. You should probably hire an experienced return preparer or CPA to prepare your return or advise you on your specific factual situation.

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