5 ms·

Depending on the individual and how much stuff they have, full service relocation can be $20k or even more. Usually that means a full move-and-pack of a multi-p

Depending on the individual and how much stuff they have, full service relocation can be $20k or even more. Usually that means a full move-and-pack of a multi-person household (say, a 3br house with 3 kids), moving of vehicles, and marketing/sales of a house. Plus temporary housing at new location, and assistance buying a house. For context, I had a full move-and-pack for a one bedroom apartment (no temp housing, nothing extra, just the moving service) between two cities ~300mi away and total cost was $6k. Now, it was totally worth it, since I literally did not do any packing what-so-ever. They showed up to a fully furnished apartment with stuff in cabinets/bookshelves, and ~24 hours later they dropped off boxes of stuff and all my furniture in my new location. This type of relo is much less common these days though, due to rules changes regarding reimbursement for relocation expenses. I think most companies prefer lump sum payments now, since you can't deduct ANYTHING for moving expenses. If a company does provide you $20k in relocation coverage (even if you never see the money), you're now on the hook for an extra $20k in 'income' which you have to pay taxes on.

pyuser583 4y ago
Are there companies that offer those sorts of “all included” services to people? I’ve been trying to convince my wife to move because our house is too big, and we have tons of value in it, but she doesn’t want the work (understandably).
sidewndr46 4y ago
Is that Federal income you're referring to? I'd assume individual states would not count that as income, otherwise they'd be concerned that employers could not relocate employees to their state.
- lotsofpulp 4y ago
  I doubt states would be concerned about taxing relocation benefits specifically because it might dissuade people from moving to the state. It would be a tiny tax liability relative to other tax liabilities that already vary such as income tax, property tax, and sales taxes. If those differences do not dissuade people from moving, then a one time ~5% income tax on $5k to $20k of moving expenses is not going to move the needle.
- Kirby64 4y ago
  Yes, I'm referring to US federal income. No idea how state income tax rules work, as there's so many different rules and I'm sure they vary (e.g., one state may allow relo deductions, one state may not).
ballenf 4y ago
Do accounting or tax rules block more efficient approaches of selling furniture and re-buying at destination? Relocation expenses are deductible, but I don't think furnishing allowances are, e.g.
- Kirby64 4y ago
  For the US, any relocation expenses are not tax deductible for the employee, period. I think there's some tax deductions you get as a business, but for the employee any money spent on the employee for relocation is considered taxable without exception.
  - BayesianDice 4y ago
    Interesting to learn of the US rule. In the UK, up to £8000 of relocation expenses can be provided tax-free, for "qualifying expenses" (mainly costs of buying/selling home and moving -https://www.gov.uk/expenses-and-benefits-relocation/whats-exempt https://www.gov.uk/expenses-and-benefits-relocation/whats-ex...) although there is some allowance for a flat-rate payment if it is reasonable (https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim03139 https://www.gov.uk/hmrc-internal-manuals/employment-income-m...). I'm reasonably confident any payment would be tax-deductible for the employer, it's just a question of how much is taxable as income in the hands of the employee.
    - Kirby64 4y ago
      It used to be that way that any amount (I think?) was considered tax exempt/tax-free if it was used for the purposes of a qualifying list of expenses (similar to what you have in the UK). There was a tax law passed that came into effect in 2018 that removed that rule, however. I believe it'll go back to 'normal' in 2025 for moving expenses.
pc86 4y ago
> If a company does provide you $20k in relocation coverage (even if you never see the money), you're now on the hook for an extra $20k in 'income' which you have to pay taxes on. This is just not true.
- Kirby64 4y ago
  To be clear, I mean if your employer incurs $20k in costs for relocation for you. Not if you get a '$20k' relocation allocation and you only spend, say, $5k. The tax rules changed in 2018, any relocation-related expenses are considered taxable as income with no exceptions (unless you're in the military).
JamesianP 4y ago
They do "gross ups" now that pay your tax in addition to your relocation expenses. Or at least they can, definitely for more senior roles and very-expensive (i.e. house) relocations. And during the red-hot job market and shipping expenses spiking during covid, relocations were sometimes running way more than $20k.

pyuser583 4y ago

Are there companies that offer those sorts of “all included” services to people? I’ve been trying to convince my wife to move because our house is too big, and we have tons of value in it, but she doesn’t want the work (understandably).

sidewndr46 4y ago

Is that Federal income you're referring to? I'd assume individual states would not count that as income, otherwise they'd be concerned that employers could not relocate employees to their state.

lotsofpulp 4y ago
I doubt states would be concerned about taxing relocation benefits specifically because it might dissuade people from moving to the state. It would be a tiny tax liability relative to other tax liabilities that already vary such as income tax, property tax, and sales taxes. If those differences do not dissuade people from moving, then a one time ~5% income tax on $5k to $20k of moving expenses is not going to move the needle.
Kirby64 4y ago
Yes, I'm referring to US federal income. No idea how state income tax rules work, as there's so many different rules and I'm sure they vary (e.g., one state may allow relo deductions, one state may not).

ballenf 4y ago

Do accounting or tax rules block more efficient approaches of selling furniture and re-buying at destination? Relocation expenses are deductible, but I don't think furnishing allowances are, e.g.

Kirby64 4y ago
For the US, any relocation expenses are not tax deductible for the employee, period. I think there's some tax deductions you get as a business, but for the employee any money spent on the employee for relocation is considered taxable without exception.
- BayesianDice 4y ago
  Interesting to learn of the US rule. In the UK, up to £8000 of relocation expenses can be provided tax-free, for "qualifying expenses" (mainly costs of buying/selling home and moving -https://www.gov.uk/expenses-and-benefits-relocation/whats-exempt https://www.gov.uk/expenses-and-benefits-relocation/whats-ex...) although there is some allowance for a flat-rate payment if it is reasonable (https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim03139 https://www.gov.uk/hmrc-internal-manuals/employment-income-m...). I'm reasonably confident any payment would be tax-deductible for the employer, it's just a question of how much is taxable as income in the hands of the employee.
  - Kirby64 4y ago
    It used to be that way that any amount (I think?) was considered tax exempt/tax-free if it was used for the purposes of a qualifying list of expenses (similar to what you have in the UK). There was a tax law passed that came into effect in 2018 that removed that rule, however. I believe it'll go back to 'normal' in 2025 for moving expenses.

pc86 4y ago

> If a company does provide you $20k in relocation coverage (even if you never see the money), you're now on the hook for an extra $20k in 'income' which you have to pay taxes on. This is just not true.

Kirby64 4y ago
To be clear, I mean if your employer incurs $20k in costs for relocation for you. Not if you get a '$20k' relocation allocation and you only spend, say, $5k. The tax rules changed in 2018, any relocation-related expenses are considered taxable as income with no exceptions (unless you're in the military).

JamesianP 4y ago

They do "gross ups" now that pay your tax in addition to your relocation expenses. Or at least they can, definitely for more senior roles and very-expensive (i.e. house) relocations. And during the red-hot job market and shipping expenses spiking during covid, relocations were sometimes running way more than $20k.