In 2018, my company is giving me a $10,000 lumpsum payment for relocation purposes. This is considered taxable income and is only to be used for moving expenses. This will get reported on my W-2 as gross pay, however it is deductible by Moving Expense Deduction.
The company will first withhold taxes (for me, probably around 22%) on this lumpsum payment. I'm a bit confused on how to deduct this on moving expense deduction.
The moving expense deduction states that only if I spend MORE than the income given for moving expenses will I be able to claim it as a deduction, otherwise I must report it as taxable income.
Say that after taxes withheld, I end up receiving $7800 in the bank. I end up spending $14000 on moving expenses (storage costs, transportation, shipping, etc). Then (1) do I deduct $6200 or $4000 on my tax return? (2) If I spend $4000 then am I taxed on the remaining $3800? (3) What happens to the $2200 of the lumpsum that gets withheld, is there a way to get that refunded if I spend more than $10000 on moving expenses?
I believe the moving expense states that I can deduct storage costs for up to 30 days. Say I use someone's apartment as a storage space, and I pay that person, instead of using an actual Public Storage warehouse, (4) does that still count as moving expenses I can deduct? (5) How would I have proof of this (since it's going to be a peer to peer payment instead of peer to business payment)? (6) Would I need to have evidence ready that I made payment of this (like in bank statement) and written confirmation from the other side that I had paid them?
(7) What about food, living expenses, transportation expenses for relatives that have helped me move here? Are those considered moving expenses as well?
