Announcement

Collapse
No announcement yet.

Moving allowance

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Moving allowance

    I am given a moving allowance of $10 K to go to the new practice. It’s being handled by an outside company and reimbursed to them by the hospital. One caveat I received in an email is to run things by a financial expert to make sure I pay necessary taxes. Are there any obvious things I should know (I don’t know much, admittedly. Working on getting educated in my finances)?

    I don’t have much in the way of property. My most valuable things are appliances. I’ll also be moving about 1000k miles (which I feel would favor me in a moving deduction).

    Any and all advice is appreciated.

  • #2
    My understanding is that moving allowances in 2018 are now considered taxable income for both you and the employer (you pay normal W2 marginal taxes on them, they pay payroll taxes).  I think this changed this year as a result of the new tax system.  I haven't found confirmation of that on the IRS website but several academic hospital websites allude to the changes.  It's taxable whether reimbursed by the hospital directly to you or by the hospital to a third-party on your behalf (moving company).

    Also, there is no longer an individual moving deduction for moving expenses so you're better off being reimbursed by your employer for your mileage at $0.56 or $0.57/mile.

    Comment


    • #3
      Unfortunately, beginning in 2018 and for (at least) the next 8 years, the employer must report payments for moving expenses to you as income and you are not allowed any tax deduction. The only exception is for certain members of the Armed Forces on active duty, who can still deduct qualified moving expenses.

      In other words, you can treat any payment for moving expenses the same as you would a sign-on bonus.


      Also, there is no longer an individual moving deduction for moving expenses so you’re better off being reimbursed by your employer for your mileage at $0.56 or $0.57/mile.
      Click to expand...


      Unfortunately, such a reimbursement would also be taxable as it would not qualify as an allowable expense under an accountable plan.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

      Comment


      • #4
        I was just informed of this by the hospital that I am signing with.  They pay a $10000 moving allowance as well.  I was able to confirm that it is reported as regular income and would be taxed. The HR staff gave me the option:

        1) To use a hospital sponsored moving company, which they would pay directly and mail me a check for the difference (minus taxes).  OR

        2) To pay for my own moving company and they would send me a check for $10000(minus taxes).  I chose to use PODS.

        Best of luck with the move. Consider the money a sign-on bonus!

        Comment


        • #5
          Thanks for the help. Also, the moving company is sending someone to “survey” my condo to see what things are worth. They say they insure everything based on that. Is this a common practice? I mentioned buying new furniture in the new town and was recommended to buy it here (much higher cost of living area). I’m assuming the advice is for the moving company to make more and potentially having to pay more taxes (with the new knowledge I have!).

          Comment


          • #6
            Pretty easy to check furniture prices where you are versus where you'll be and also to compare shipping costs direct versus paying the movers. As for the survey, I really don't know if it's standard practice, perhaps someone else will comment. Sounds like a good idea to me, though, kind of like the rental car company checking the car for dings before you take it out. Good luck in your new job!
            Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

            Comment


            • #7
              Turn on the video mode of your phone and get good imagery of everything expensive or valuable BEFORE the movers lose, steal, or break it. Get model numbers and serial numbers on firearms and electronics.

              Comment


              • #8
                Yes, having someone come to survey your stuff is common practice. They will base the final price on the total weight of your stuff. We're going with Mayflower moving and just got the same thing done.

                Comment

                Working...
                X