I relocated for a job with reimbursement. Expenses occurred in 2016. Reimbursement in 2017. Do I include the reimbursement? What happens next year when it's on my W2s?

[gohowl]

I'm wondering how to enter this in Turbo Tax.  It asks for moving expenses and any reimbursement even if it isn't in my W2s.  Do I include the reimbursement even though I got it in 2017 and it is not on my W2s?  What will I need to do next year to make sure the income is not taxes since it is covering expense from the previous year?

[Phillip1 · Accepted solution]

In this situation, you can choose when to deduct the moving expenses in the year that you receive the reimbursement. This will prevent an issue of needing to claim the moving expenses you are reimbursed in 2017 as income

See the following from IRS Publication 521:

Choosing when to deduct.   If you use the cash method of accounting, which is used by most individuals, you can choose to deduct moving expenses in the year your employer reimburses you if:

• You paid the expenses in a year before the year of reimbursement; or

• You paid the expenses in the year immediately after the year of reimbursement but by the due date, including extensions, for filing your return for the reimbursement year.

How to make the choice.   You choose to deduct moving expenses in the year you received reimbursement by taking the deduction on your return, or amended return, for that year.