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Q: Tax question - new job signing bonus vs reimbursement for move expenses ( No Answer,   2 Comments )
Question  
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
Answer  
There is no answer at this time.

Comments  
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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