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Top 50 Relocation Questions: Part 4 of 5

Welcome to week four of our five week series to go over the 50 most common questions we receive from transferees and the answers that we provide on a regular basis. This week, as promised, it’s time to go over questions 31-40.

Without further ado, here are 10 more of the most common questions we receive from transferees. We hope you find this helpful and if you have anything to add, please let us know!

  1. Should I tip the movers?

It is customary to tip movers for a job well done, but it is not required. You should always tip what you can afford and what you feel is appropriate for the service you received. If you do want to tip and you don’t know where to start, we usually suggest $20-25/person in the moving crew. If you want to tip more than that because your move was particularly difficult or you really like your movers, please do so. If you don’t have the extra cash to tip, then that is ok, too. If your crew has gone above and beyond and you have a long day of moving, treating to lunch (pizza, subs) is always appreciated. Also, it’s nice to provide water, soda and/or Gatorade (especially in the hot summer months!). The consideration will go a long way with the moving crew.

  1. Is the crew the same at destination?

Crews are regionally based and do not follow drivers to the destination. For this reason, you will have a new, local crew at your destination.

  1. What is valuation coverage?

You will automatically receive valuation coverage of .60/lb on your items. You can further protect your belongings by purchasing additional valuation coverage. In the case of an employer sponsored relocation, this coverage may already be covered for you so do be sure to ask your relocation counselor.

The valuation option you choose determines the basis upon which any claim will be adjusted and establishes maximum liability of the mover. The liability of a carrier for loss or damage is based upon the carrier’s tariffs, as well as federal laws and regulations, and has certain limitations and exclusions. Valuation is not insurance; it is simply a tariff-based level of motor carrier liability. If you desire protection afforded by an insurance policy, you should talk with your insurance company representative about available coverage.

All articles of “extraordinary value” (items having a value of more than $100/pound) in your shipment must be listed on the High-Value inventory form, which will be given to you by your mover. Articles of extraordinary value might include jewelry, furs, art, coin collections and silverware. In the event of a claim, any settlement regarding an article of extraordinary value listed on the High-Value inventory form is limited to the value of the article, not to exceed the declared value of the shipment, based upon the valuation program applicable to your shipment. If such an article is not listed on the form, the carrier’s liability is limited to $100/pound per article. Shipments, which move with a released rate of liability of 60 cents/pound per article, are excluded from this High-Value inventory provision.

  1. How can I maximize the protection for my belongings?

You can pay for full value protection. If your employer is sponsoring your move, however, this may already be covered for you. Under this plan, if your articles are lost or damaged when in our care, they will be repaired, replaced with like items, or a cash settlement will be made for the current market replacement value, regardless of the age of the item.

Full value protection and deductible options are available in dollar increments to fit your needs at very attractive rates. Our total liability for loss or damage will be the amount you declare as the value of your shipment. However, the minimum total declared value must be at least equal to the weight of your shipment multiplied by $6.

  1. What do I do if something is missing or damaged?

If you get to your destination and you notice that an item marked on the inventory form is missing or damaged, then you can file a claim with the moving company. As a condition to recover a claim for loss, damage, or delay with the van lines, it must be submitted within (9) nine months from the date of delivery. A customer can request a claim form to be mailed and submitted in writing or electronically through the Internet.

  1. What drives the cost of storage?

Storage costs vary by company but, for the most part, they are determined by your load’s weight and the number of days you have in storage. Refrigerated storage or other special needs will also increase cost.

  1. Can I access my goods once they are in storage?

This depends on what kind of storage facility you are using. If you are using a self-storage facility, yes. If you are moving with a major van line and using their storage facilities, your goods may not be as accessible. In this case, you can make arrangements to access your goods but you will be charged a significant fee every time.

  1. What is a gross – up?

You are required to pay withholding and payroll taxes for all reimbursements that are not deductible moving expenses. Because these reimbursements are considered taxable income, this will cause you to pay more in income taxes. Most companies will help alleviate the tax burden to some extent by paying a portion or possibly all of these taxes on your behalf. Since this tax payment is also taxable income to you, the company will “gross up” this payment to help cover the additional tax liability. In other words, you will be paid a larger gross amount so that the net benefit, after taxes, will approximate the moving expenses. The gross up calculation is complicated in that each tax payment on your behalf is taxable income. Therefore, since the company is paying the tax on the tax, and the tax on that tax, and the tax on that tax, and so on, the gross amount of the payment is considerably higher in order for the amount you receive to be the amount of your actual expense after the company pays all or a portion of the taxes on your behalf.

  1. What’s the difference between grossing up and making whole?

Grossing up is adding enough additional dollars to an expense to cover the taxes on that payment so that the transferee is not absorbing the full tax burden. Making whole is covering ALL of the tax burden. Most companies only gross up at the supplemental rate for federal. Where “making whole” gets sticky is when the additional “relocation income,” pushes you, the transferee, into an income bracket where you no longer qualify for certain deductions. If a company truly wants to make you whole, they will reimburse you for these lost deductions as well. Best practice suggests, however, that companies stay away from the use of “making whole” and indicate that they will tax assist and which method they will use for federal – at the actual rate or the supplemental rate – along with the other taxes they will pay – ie FICA (which is OASDI and Medicare), state tax, local taxes. The “gross up” is the amount of additional dollars paid by company on behalf of you to the various tax jurisdictions to cover the amount of tax burden that a company is willing to cover.

  1. Which benefits are tax deductible?

The shipment of your household goods and the travel to your final destination is tax deductible. Any other relocation expenses that your employer reimburses or pays on your behalf must be included in your gross income. That payment or reimbursement is subject to withholding and employment taxes.

Stay tuned next week, same place same time for questions 41-50 – the last post of this series!

 

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RICK CALANNI
VP of Business Development Northeast Region

 

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