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| Subject:
Tax question - new job signing bonus vs reimbursement for move expenses
Category: Business and Money > Accounting Asked by: li_tx-ga List Price: $10.00 |
Posted:
21 Nov 2005 17:18 PST
Expires: 21 Dec 2005 17:18 PST Question ID: 596008 |
I am taking a new job that I must move to Long Island, New York for. The new employer has given me the option that they would pay for move expenses up to $10,000, or they would give me a signing bonus of $10,000. This brings up two questions: -- If I elect to have them pay the move expenses, can they reimburse me without me being taxed on the reimbursement, or would they have to pay the expenses directly to the vendor (i.e. hotels, moving companies, etc.) -- The advantage to the signing bonus is that if I can save money on the move, I would get to keep the extra amount. If I go this route, and write off the move expenses on my income taxes, would the tax effect end up being the same with either option, or would one option result in higher taxes than the other? Thanks |
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| There is no answer at this time. |
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| Subject:
Re: Tax question - new job signing bonus vs reimbursement for move expenses
From: doctawood-ga on 21 Nov 2005 18:16 PST |
Move expenses are tax deductible under your line item deduction (as are costs of traveling to interview for the job and other transition related expenses). Therefore: Employer reimburses - the emlployer would reimburse you and this would be taxable income, but the initial expenses would be deductible. Therefore your net would be back at your base salary as if you had no tax deduction. Employer give you a bonus - you would pay out of pocket and count it all as tax deductible and the entire bonus would be taxable... exactly the same as above, but the dollar amount would still turn you a profit if you spent less than 10K moving... the only question is whether this bumps you in tax brackets... Some areas also tax "bonus pay" higher initially but it is regained when filing for your tax returns. |
| Subject:
Re: Tax question - new job signing bonus vs reimbursement for move expenses
From: myoarin-ga on 21 Nov 2005 19:47 PST |
Hi, Wouldn't your answer depend on how much you can pocket of the $ 10,000 if you chose the bonus and your tax rate on that amount? That is a couple of unknowns for us here, |
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