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emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2593
Experience:  IRS licensed Enrolled Agent and tax instructor
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My employment contract includes a "relocation bonus." I am

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My employment contract includes a "relocation bonus." I am trying to determine what might be deducted against that relocation bonus e.g. costs incurred during my trips to my new company prior to the relocation, rea estate agent commission charge for the sale of my house, etc.
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.
Hi. My name is ***** ***** I will be happy to help you.
Relocation bonus is part of the total compensation so you will have to claim it is income. However you may be able to deduct moving expenses. To deduct moving expenses you will need to meet certain tests:
1. To move has to be related to your new job, meaning you had a job offer before you moved
2. Distance test: your new main job location is at least 50 miles farther from your former home than your old main job location was from your former home.
3. Time test: If you are an employee, you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location (39-week test).
Usually, if you are permanently relocating more than 50+X (current commuting) miles you can deduct your moving expenses. Here are expenses that are deductible: http://www.irs.gov/publications/p521/ar02.html#en_US_2014_publink1000203491
and here are expenses you CANNOT deduct:
Any part of the purchase price of your new home.
Car tags.
Driver's license.
Expenses of buying or selling a home (including closing costs, mortgage fees, and points).
Expenses of entering into or breaking a lease.
Home improvements to help sell your home.
Loss on the sale of your home.
Losses from disposing of memberships in clubs.
Mortgage penalties.
Pre-move househunting expenses.
Real estate taxes.
Refitting of carpet and draperies.
Return trips to your former residence.
Security deposits (including any given up due to the move).
Storage charges except those incurred in transit and for foreign moves.
I am assuming your new employer will not reimburse you for any other relocation expenses, beside the relocation bonus.
IRS publication 521 is a good source for more information: http://www.irs.gov/publications/p521/ar02.html#en_US_2014_publink1000203509
Let me know if you have any questions.
Expert:  emc011075 replied 1 year ago.
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