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Taxes regarding relocation - Final Move/Travel

Personal Finance & Money Asked by user12562215 on August 16, 2020

If my spouse and I both get relocation package from different employers, and both employers cover the final move/travel (from current address to out-of-state new address) for 2 of us, can each one of us claim final travel twice?

Example: we traveled to NYC on 7/1 and claimed reimbursement from my spouse’s employer. On 7/15 we traveled back to Boston, and on 7/19 we traveled to NYC again. Can we claim reimbursement from my employer for the 7/19 trip?

Thanks!

2 Answers

Each employer should specify what they will pay for, or if there is a maximum amount. they will pay. An employer might even give a flat amount no matter what your expenses.

Before the 2018 tax changes it was very import to be able to document your expenses, and submit it to the company. If you followed the riles set forth by the company, and they followed the riles from the IRS, then your reimbursed expenses were not taxable income.

But under the current tax law you can't deduct your moving expenses, and if the company pays for your moving expenses it is taxable income.

So this boils down to following the rules of the companies. Avoid submitting the same expense to both companies. If caught they can decide that you filed a fraudulent expense report and at the least want their money back, and at the worst they could fire you and want all the moving expenses back.

Please review what expenses they cover. Do they pay for a moving company to load everything and drive it to the new place? what happens if you do it yourself but make multiple trips? What about mileage and hotel? I know Boston to NYC doesn't require a hotel, some some moves involve hotels and/or airfare. If the extra trip to Boston was to do something unrelated to the moving process, neither company may consider it an allowable expense.

Now if both companies have a maximum amount, then see what can be logically split so that you stay under the company maximum. You could put all the mileage and tolls under one, or split them if you have multiple vehicles that have to be moved/relocated.

It can be more confusing for the employer if you try and split a single bill between the two companies, they may have trouble understanding why the amount claimed is less than the amount that appears on a receipt. That confusion can slow down reimbursement. It can also lead to trouble if the accounting department corrects the "mistake" and gives you the extra money.

Answered by mhoran_psprep on August 16, 2020

Legally you can likely claim whatever you want (I would not fake Fattie's advice, though). It depends on what proof (if any) your employer requires. Ethically I would say that one of you should claim the expense, or you each should claim half. It would be ethically wrong for both of you to claim the same expenses, or to claim expenses that were not part of your final relocation. If each trip was a "move" for one of you, that would be a different situation.

I would also say that if one of you is working for a smaller company you may get more credit for turning down the relocation (saving the company some money) than the reimbursement. Talk to your hiring manager or the benefits department. They may offer to pay you anyway just for being honest, or it may improve your reputation. Or both!

From a tax standpoint you're on the hook for the tax on any reimbursement you get as it's considered income. Your employer may withhold tax, or may "gross up" the reimbursement so it doesn't affect your take-home pay.

Answered by D Stanley on August 16, 2020

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