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I moved from Florida to Pennsylvania for a new job with my

current employee. I incurred...
I moved from Florida to Pennsylvania for a new job with my current employee. I incurred relocation costs of $38,000, which my employer either paid directly or reimbursed me (depending on the expense). My employer includes this in Box 1 on my W-2 along with my salary and bonus. My concern is that this will increase my AGI (reducing my medical deduction) as well as trigger the AMT for me. Can I include these moving expenses as a deduction even though I was reimbursed? My initial thought is "yes" because they are included on my W-2 Box 1.
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1/3/2012
wm030303
wm030303, Enrolled Agent
Category: Tax
Satisfied Customers: 112
Experience: I am both a CPA and EA with over 30 years of experience in solving tax related issues.
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wm030303 :

Hello and welcome to Just Answer.

wm030303 :

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

Customer:

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?

wm030303 :

If this is the answer you are loking for then please kindly accept.

Customer:

Can you see my follow-up?

wm030303 :

Yes because they were in included in your wages you could offset them as an adjustment for whatever costs you incurred.

Customer:

OK, thanks.

wm030303 :

kindly press the accept button so that I could get paid.

wm030303
wm030303, Enrolled Agent
Category: Tax
Satisfied Customers: 112
Experience: I am both a CPA and EA with over 30 years of experience in solving tax related issues.
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Customer reply replied 5 years ago
One follow-up. My reimbursed moving costs include movement of household goods, transportation from old city to new city, home sale commissions, reimbursement for loss on the sale of my house, and temporary living while my new house was being readied. Can all of these be included as moving expense deductions?
Customer reply replied 5 years ago
Relist: Answer came too late.
Stephanie B.
Stephanie B., Enrolled Agent
Category: Tax
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Experience: MTax, EA, QuickBooks Proadvisor. Over 15 years accounting and tax experience specializing in individual and small business.
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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 loss
on the sale of your home is not a deductible moving expense so it must be
included 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_publink1000203521

If this answers your question, please click the accept button as this is the
only 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 at
the time, I will be.

I appreciate the opportunity to assist you and I look forward to your response.

Stephanie



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Customer reply replied 5 years ago
Thank you for your reply. Let me take one specific example. If I was reimbursed $6,000 on the loss on the sale of my home and it is included in Box 1 of my W-2 (not Box 12), am I not able to deduct this in any way? Same question for real estate commissions. My concern is that this could drastically increase my AGI, which will phase out my medical deductions and potentially result in AMT.

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.

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Customer reply replied 5 years ago
Is it common for these types of non-deductible expenses to be included in Box 1? I was surprised by this. Also, I am assuming that temporary living is not deductible? Those are my last questions - thank you for your help.
Yes, this is common. Nondeductible items must be included in Box 1 of your W-2 and reported as income. And unfortunately many employers do not let the employees know this is how it works. Nondeductible expenses include cost of meals while traveling, temporary living expenses, or house hunting expenses. Sorry.
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Please let me know if you have any further questions regarding this issue. If you are satisfied with the answer, please click the accept button as this is the only way we get paid for the services we provide to you.

Stephanie
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