Got a lump sum relocation amount(A) and also taxes on it (amount B). Both A&B are included in my W-2 box1. Can I deduct A&B as moving expense while filing my tax return?

Forum|Forum|7 years ago
June 5, 2019
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My company paid me a lump sum relocation amount(A) and also taxes on it (amount B). Both A&B are included in my W-2 under box 1. Can I deduct this amount as moving expense while filing my tax return ? What if my actual expense(amount C) of moving/shifting/travelling etc was less than amount A, can I still deduct amount A & B as moving expense or if I can only deduct amount C as my moving expense ? Does IRS asked for the proof of actual expense ?

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A

AmandaR1

Employee

Because you are being taxed on your reimbursement, your relocation amount was simply a bonus for tax purposes. You can deduct all qualified moving expenses (it's when you are reimbursed before tax, that things get complicated).

The software will ask you about all your moving expenses and have blue hyperlinks to more information for the qualifications and expenses you can deduct.

You do not need to include proof of each expense to the IRS, when submitting your return. It's not standard for the IRS to request this information either.

However, proof of your deduction can be requested, so you should have detailed records for the amount of your moving expense deduction. This could be made of:

A document which lists each expense and the total
If you have the reciept or not, and if not, include the info that would have been on the reciept
Bank or credit card statements
Email confirmations or any other proof

S

svnitparasAuthor

Employee

Hey thanks a lot for such a speedy response.... so to be precise in my example it is amount A which I got in my bank account as relocation, my company also paid the taxes on it which is amount B, and it is amount C which I actually spent for my move (C is less than A). What amount shall I be able to deduct as moving expense in my tax return ? Amount A, or Amount A&B, or Amount C ? For proof I have my amount A mentioned in my offer letter as relocation amount, I have salary Slip of amount A&B, & I have receipts of my move expense for amount C. Just a note that my move was international i.e. I moved from India to US(NJ) for my job, not sure if that impacts anyways my moving expense deduction. Appreciate your help and guidance on this.