How do I write off taxes for moving when I am paid a signon bonus that I am supposed to use for relocation?

Question

In my new job, I will be receiving a one-time bonus of $3,500.00. All appropriate taxes will be withheld for this supplemental income. Because some of the costs associated with my move may be tax deductible, I was wondering if I could get additional information regarding tax reporting where I could write off for moving expenses.

Any ideas would be greatly appreciated.

Answer 1

It sounds like it is loosely a reimbursement; since it does not sound like you have to give back anything you don't spend on moving costs, the bonus would be classified as having been paid under a "non-accountable" plan. How you will report it will depend on how your employer reports it on your W-2.

IRS Publication 521 covers moving expenses in detail, and the link below goes straight to the section on how to report reimbursements based on how your W-2 shows it. Good luck! :-)

Answer 2

Unless the money paid by the company is specifically earmarked for the move you can deduct your moving expenses if you otherwise qualify. And since the money is included on your W-2, you can take the deduction even if it is intended for your relocation.

Answer 3

If you have to move for your job then you can deduct moving expenses that you pay out of your own pocket over and above the $3,500 your company gives to you.