Hi soonershan -
It depends on what type of expenses they paid for and if it was reported on your W-2. If they aren't "typically" a deductible expense and are included in your W-2, the employer will usually "gross up" the amount to compensate for taxes. That said, you may be able to deduct expenses depending on your situation.
Whether or not you can deduct any moving expenses depends on the type of
reimbursement plan your employer has. If you don't know, you will need to
ask them. If they have an "accountable" plan, the deductible
expenses would not be included in Box 1 of your W-2 and wouldn't be deductible.
You can get exact details and examples in the IRS Publication I will link to
later.
Your employer should not include in your wages reimbursements paid under an
accountable plan for moving expenses that you:
·
Could deduct if you had paid or incurred them,
and
·
Did not deduct in an earlier year.
These reimbursements are fringe benefits excludable from
your income as qualified moving expense reimbursements. Your employer should
report these reimbursements on your Form W-2, box 12, with Code P.
If your deductible expenses are included in Box 1 of your W-2, you can
deduct them if your move qualifies.
You can deduct the cost of transportation and lodging for yourself and
members of your household while traveling from your former home to your new
home. This includes expenses for the day you arrive. However, you may
not include any expenses for food.
The day of arrival is the day you secure lodging at the new place of
residence, even if the lodging is on a temporary basis. You can
include any lodging expenses you had in the area of your former home within one
day after you could no longer live in your former home because your furniture
had been moved.
You can include the cost of storing and insuring household goods and personal
effects within any period of 30 consecutive days after the day your things are
moved from your former home and before they are delivered to your new home.
The distance test: Your new workplace must be at least 50 miles
farther from your old home than your old job location was from your old home.
If you had no previous workplace, your new job location must be at least 50
miles from your old home.
The time test: If you are an employee, you must work full-time
for at least 39 weeks during the first 12 months immediately following your
arrival in the general area of your new job location. If you are self-employed,
you must work full time for at least 39 weeks during the first 12 months and
for a total of at least 78 weeks during the first 24 months immediately
following your arrival in the general area of your new work location. There are
exceptions to the time test in case of death, disability and involuntary
separation, among other things.
This IRS link may be helpful as well http://www.irs.gov/taxtopics/tc455.html
and this IRS Publication http://www.irs.gov/publications/p521/
Hope this helps!
Karen
