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Your moving expenses are deductible on form 3903 as an adjustment to income. So they will reduce your AGI. See http://www.irs.gov/formspubs/article/0,,id=239165,00.html
So, even though my employer paid the expenses, because they are included in Box 1 of my W-2, I can deduct from my income?
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Yes because they were in included in your wages you could offset them as an adjustment for whatever costs you incurred.
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Thank you for using Just Answer.Your employer may have paid more expenses than can actually be deducted as moving expenses. You need to be sure of what makes up the amount your employer has included in your income on Box 1 of your W-2. For example, the losson the sale of your home is not a deductible moving expense so it must beincluded in your income. There may also be an amount in box 12 of your W-2 with a code P. These are the moving expenses your employer is not including in your income. You are not allowed to take another deduction on your personal tax return for these moving expenses because they were reimbursed and not included in your income. Here is a link to the IRS website for moving expenses. http://www.irs.gov/publications/p521/ar02.html#en_US_2010_publink1000203521If this answers your question, please click the accept button as this is theonly way we get paid for the assistance we provide to you. If you need more clarification, please let me know. If I am not available atthe time, I will be. I appreciate the opportunity to assist you and I look forward to your response.Stephanie
You are correct. The $6000 loss on the sale of your home is not a deductible moving expense so it can not be deducted there. You can also not deduct personal losses on Schedule D, so it isn't deductible there. Same for real estate commissions. Unfortunately, this could increase your AGI and result in AMT for the current tax year.