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My company paid to relocate me. There was Tax assistance provided to me, but that added the tax assistance to my income. Is anything deductible by me?
Since the moving expenses were reimbursed by your company, the relocation expenses would not be deductible.What do you mean by tax assistance?
Some of the relocation expenses are taxable by the Feds. In turn, the company, adds a tax assistance amount, but includes it as income. All of the relocation expense was added to my income, W-2 box 1, but the tax assistance was created to offset the taxes owed.
In that case, since the relocation expense is included on your W-2 box 1 you will be able to get a deduction for moving expense as an adjustment on Line 26 of Form 1040Use Form 3903 to figure your moving expense deduction. Deduct your moving expenses on line 26 of Form 1040. The amount of moving expenses you can deduct is shown on line 5 of Form 3903.You can deduct the reasonable expenses of: 1. Moving your household goods and personal effects (including in-transit or foreign-move storage ex- and 2. Traveling (including lodging but not meals) to your new home.You will not be able to get a deduction for Tax Assistance.Please note: This advice is based on limited facts provided by you. Since it is impossible for me to identify and consider ALL the relevant facts, this advice is not intended or written to be used for the purpose of avoiding penalties, and cannot be used for that purpose.
The total cost of the relocation was $13,500, this was added to my income. $3,000 was for transportation of household goods, not added to W-2 and paid to a 3rd party (movers) by the company. In that $13,500, $4,000 tax money was given to me to offset the taxes. Now it seems like I am paying tax on the taxes given to me to offset the required tax in accordance with moving. If in a 28% tax bracket, I would think that I should be able to deduct 28% of the $4000, otherwise I'm paying tax on the tax.