I am helping my youngest son prepare his tax returns, and I have a question about moving expenses. He received a Masters from Berkeley in May 2017, got a job with ABInBev, and moved from Berkeley to Jacksonville, FL for 3 months for training. After Jacksonville, he was assigned to Fort Collins, CO, and will be there for the foreseeable future.

I know that expenses related to moving for a new job are deductible, but there is a requirement that you have to work full time for a minimum of 39 weeks starting at the time of the move. He was only in Jacksonville for roughly 12 weeks, but he's still working full time for the same employer.

Can he claim moving expenses from Berkeley to Jacksonville and for Jacksonville to Fort Collins? Can he claim it as one long move with a stopover in Jacksonville?

It certainly seems to be in the spirit of the rule as these were required moves, but 2700 miles to Jacksonville plus 1800 miles to Fort Collins totals 4500 miles--that's a long move.

He didn't hire a moving company or anything else that would be expensive, but legitimate. He would claim mileage and a few hotel rooms.

What do y'all think?

Not a CPA, so I'm going to post this in the form of a question that you can go and seek your own confirmation on:

Would you be able to deduct the hotel and mileage from Berkeley to Jacksonville as non-reimbursed work related travel expense? (That is, if he had simply made this trip to attend work related training for a weekend, wouldn't that be deductible?)

Then, would you be able to deduct the hotel and mileage from Jacksonville to Fort Collins as a non-reimbursed moving expense? (Assuming he stays in Fort Collins for 39 weeks after he arrives in Fort Collins).

The net deduction would be the same, and you wouldn't have to try to treat it as one long move.

How much money are we talking about? Running afoul of the rules can be risky. Some expenses can be audit flags.

Not a CPA. Here's a link to the IRS Publication. In reading the Pub briefly it would appear you can still claim moving expenses that you incur in 2017 even if you don't currently meet the time test but will eventually do so in 2018. It also notes that you can file an amended return after you meet the time test. If you fail to meet the test and claim the expense there's also a set of rules.

quote:

Originally posted by ZSMICHAEL:
How much money are we talking about? Running afoul of the rules can be risky. Some expenses can be audit flags.

4500 miles at the 53.5 cent mileage rate, plus hotels, can be $500-1100 of tax savings, depending on his tax bracket and how much he spends on hotels.

If the expenses and deductions are legit, you shouldn't fear an audit.

I deducted ALL of my moving expenses down to boxes and tape, blankets for equipment wraps. Mileage, hotels and meals.

Also deducted the cost of the storage POD as well as the cost of Mayflower to move me from NH to Tucson.

It was simply a lump sum cost but I could itemize every single purchase if I had to.

I am a CPA. I would deduct both moves. The requirement that you are working 39 weeks in the commuting area of the new employment has an exception if the move out of that area is necessary for continued employment with that employer. See ISR Pub 521.

quote:

Originally posted by Sailor1911:
I am a CPA. I would deduct both moves. The requirement that you are working 39 weeks in the commuting area of the new employment has an exception if the move out of that area is necessary for continued employment with that employer. See ISR Pub 521.

This is what makes this place incredible.

No question goes unanswered here...

quote:

Originally posted by Sailor1911:
I am a CPA. I would deduct both moves. The requirement that you are working 39 weeks in the commuting area of the new employment has an exception if the move out of that area is necessary for continued employment with that employer. See ISR Pub 521.

Thank you! I hadn’t read far enough to see this exception.

Am I the only one stunned that AB didn't cover the moves?
5 corporate moves under my belt all paid by the employer including one after I got RIF'd.

quote:

Originally posted by Powers77:
Am I the only one stunned that AB didn't cover the moves?
5 corporate moves under my belt all paid by the employer including one after I got RIF'd.

That is an excellent point! I definitely need to check with him to see if they gave him anything on the second move. I don't think they did on the first one because that was his initial hire.

This is my son, so I don't know offhand for sure.

And they still may be deductible, even if he was paid, depending on how they treated the payment.

quote:

Originally posted by honestlou:

quote:

Originally posted by Powers77:
Am I the only one stunned that AB didn't cover the moves?
5 corporate moves under my belt all paid by the employer including one after I got RIF'd.

That is an excellent point! I definitely need to check with him to see if they gave him anything on the second move. I don't think they did on the first one because that was his initial hire.

This is my son, so I don't know offhand for sure.

And they still may be deductible, even if he was paid, depending on how they treated the payment.

If the company paid the movers then it's generally a non event for tax. No income charged to him and no expense to deduct. There could be some non deductible expenses that the company might pay which they would charge back to him as income through the W-2.

2018 is a different issue. Moving expenses non-deductible under the new law and if the company pays it will be income and run through the W-2.

quote:

Originally posted by Sailor1911:

2018 is a different issue. Moving expenses non-deductible under the new law and if the company pays it will be income and run through the W-2.

Really? I though the original language was interpreted to still leave the ability for employers to pay expenses directly to movers or as a substantiated reimbursement, corporation still got deduction and could exclude from employee income? IOW, the only impact was on individual ability to take and deduction on 1040.

quote:

Originally posted by Georgeair:

quote:

Originally posted by Sailor1911:

2018 is a different issue. Moving expenses non-deductible under the new law and if the company pays it will be income and run through the W-2.

Really? I though the original language was interpreted to still leave the ability for employers to pay expenses directly to movers or as a substantiated reimbursement, corporation still got deduction and could exclude from employee income? IOW, the only impact was on individual ability to take and deduction on 1040.

Really!

New Law. The Tax Cuts and Jobs Act temporarily suspends the exclusion from income of qualified moving expense reimbursement for tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026, except in the case of a member of the U.S. Armed Forces on active duty who moves pursuant to a military order and incident to a permanent change of station. (Code Sec. 132(g) as amended by 2017 Tax Cuts and Jobs Act §11048(a))

And, on the other side of the coin. No Deduction for moving expenses:
New Law. The Tax Cuts and Jobs Act temporarily suspends the moving expense deduction for tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026, except in the case of a member of the Armed Forces of the United States on active duty who moves pursuant to a military order and incident to a permanent change of station. (Code Sec. 217(k) as amended by 2017 Tax Cuts and Jobs Act §11049(a))

Exceptions only applicable to Armed Forces moves.