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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13598
Experience:  15years with H & R Block. Divisional leader, Instructor
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Hi, Im relocating from Missouri to California. My employer

This answer was rated:

Hi,
I'm relocating from Missouri to California.
My employer paid me $22,950 (as relocation package) + $20,000 (as signon bonus). Both of them are in separate checks than my normal paycheck. Both amounts are being withheld 25% federal tax and 10+% California state tax.
My questions are -
1. Will these 22,950 + 20,000 be taxed differently when I filed taxes next year or will they be included in my total income and taxed at the bracket my income fall under (I'm estimating it at 33%)?
2. Is signon bonus and relocation package considered and taxed differently? My HR said they are both considered supplemental income.
2. When I file tax in April next year, can I still get deductible for moving expenses (i.e. moving cost, travel for the move, etc..)? What I'm trying to understand is - with the money my employer paid me, will all these be taxable at my tax rate or can I actually claim deductible because I used spend them on moving.

Thank you for your help in advance!

Robin D. :

Hello and thank you for using Just Answer,
Your sign on bonus will be added to your wages and will be taxed along with those. The withholding will be shown as well so you will receive credit for that amount.
The relocation will also be shown with your wages and you will be allowed to claim your actual expenses for the move when you file your return.
Moving expenses are figured on Form 3903 , Moving Expenses, and deducted as an adjustment to income on Form 1040 . You cannot deduct any moving expenses covered by reimbursements from your employer that are excluded from income. As your relaocation is going to be added to your income you will be allowed to claim the actual expenses.

Robin D. :

If you are really interested in reading about the moving expenses the best place to look is the IRS

Robin D. :

The above is the IRS publication on moving expenses and how to dedust.

Robin D. :

deduct* sorry

Robin D. :

My goal is to give you excellent service. If you are satisfied, please rate me. If you have follow-up questions on this same topic, use the reply box below. To start a new conversation with me on a new topic request me again

Customer:

Thank you, XXXXX XXXXX my situation (since company paid me one lump sum), I can claim deductible, correct?

Robin D. :

Hi

Robin D. :

Yes

Robin D. :

The relocation will be added to your wages so you can use the Form 3903 and show your expenses

Customer:

If my moving expenses are 40k, I can actually claim the 40K to be deductible even though 22950 was for relocation and the rest are sign on bonus?

Robin D. :

If you had legit moving expenses of $40,000 you can claim those

Customer:

real estate agent commision is not considered as moving cost to be claimed as deductible, right?

Robin D. :

Correct

Customer:

that is very unfortunate :)

Robin D. :

Yes :(

Robin D. :

I know

Robin D. :


  • Moving your household goods and personal effects (including in-transit or foreign-move storage expenses), and




  • Traveling (including lodging but not meals) to your new home.



Robin D. :

Use the pub I sent you the link to as you gather all your receipts

Robin D. :

I hope our CHAT was helpful

Customer:

I'm currently travelling - work in california for 2 weeks, then work in st. louis remote for 2 weeks until the family finally move in Nov. The travel and lodging can be claimed?

Robin D. :

That is not the same as moving expense to claim. You would not be allowed your travel expenses as those are more in nature of commuting now because you new job in in CA.

Robin D. :

Travel expense for moving would be the actual move of your household to CA

Customer:

What is the "traveling" that you mentioned above then? The 1 time travel from missouri to california?

Robin D. :

Yes

Customer:

can never win :)

Robin D. :

Not with that travel unfortunately

Robin D. :

If you use your car to take yourself, members of your household, or your personal effects to your new home, you can figure your expenses by deducting either:





  • Your actual expenses, such as the amount you pay for gas and oil for your car, if you keep an accurate record of each expense, or




  • The standard mileage rate of 23 cents per mile.




Robin D. :

I would still suggest you look at IRS pub 521 I sent the you

Robin D. :

It is pretty short but covers all about moving and what you can use

Customer:

At the end of it, my annual income + sign on bonus + relo are all taxed at the tax bracket my "TOTAL INCOME" falls under. (which is going to be higher than 25%) But I can claim eligible moving expenses. Do I get it right?

Robin D. :

Correct

Customer:

Thank you Robin. This is helpful.

Robin D. :

Your positive rating is always thanks enough.


 

Robin D. :

I really enjoyed working with you – please feel free to request me again when you come back to ask another question.

Customer:

sure. One last question - does the same rule apply to state as well? not sure if California has different rules

Robin D. :

Ca would allow the credit but not MO. MO will not because you are leaving. States usually only allow moving when you are coming to there state (they anticipate new tax revenue).

Customer:

got it. thank you. How do I end this and provide my rating?

Robin D. :

Do you see smiley faces?

Customer:

Thank you for your help. I feel better now that I understand it better.

Customer:

Yes, just click on them.

Robin D. :

A good one (please)

Customer:

The "Save & Exit" link is for me to save the the conversation?

Robin D. :

It is saved it is never erased

Robin D. :

always in your My Questions

Robin D. :

when you click excellent it is saved any way

Robin D. :

Let me know if you have difficulty

Customer:

I got it. Thanks again. have a good weekend

Robin D. :

Best wishes

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