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Transferee Tax Filing Tips

Tax season has arrived. It is both a headache and a relief for some people as they stumble around the rules and regulations of tax laws, exceptions, deductions, and write offs, hoping for a big return. Obviously, it’s important for everybody to take care when filing their taxes but it’s especially important for recently relocated transferees to understand exactly what their work related move entails in terms of filing. The best advice I can offer is to have your transferee speak to a professional tax consultant to ensure everything is filed correctly, but there are several tips, tricks and reminders that I can offer right now.

A quality relocation management company will be sure that your transferees understand which aspects of their move qualify for a tax deduction but as taxes can and do get very complex very quickly, there are often many items that get overlooked, resulting in a smaller return than your employees really deserve.

 

Most transferees understand that many of their relocation related expenses (household goods move, utility fees, travel costs, and mileage) are deductible if they meet the proper requirements. Remind your transferees that moving expenses are deductible if the move takes place within one year of their start date at work in the new location, the new job is at least 50 miles further from their old home than their previous job, and they have been employed full-time for a minimum of 39 weeks during the first year in the new location. In addition to the clear cut deductions, there are many smaller details that are eligible as well.

 

Common forgotten deductions as listed on Worldwide ERC:
• Tips to the moving van driver or helpers.
• Mileage for driving second or third cars to the new location (in addition to the first car). The deduction for 2015 is 23 cents per mile.
• Lodging expenses in the departure location for one night after the household goods are packed, and one night in the new location on the day of arrival.
• Moving household goods from a location other than your main home, up to what it would have cost to move them from the main home
• Storage of household goods for up to 30 days, including the cost of moving the goods into and out of storage.
• Expenses not reimbursed by your employer, such as extra crating, shipment of unusual items, tips to van line staff, etc.
Again, it’s important for transferees to consult with a tax professional to make sure that they are filing correctly, especially because there are many other small details to consider on top of those listed above. Worldwide ERC is an amazing resource as well and offers several specific tax season tips for transferees.

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RICK CALANNI
VP of Business Development Northeast Region

 

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