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Old 10-22-2015, 10:21 AM
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Relocation Expenses

Hi
My employer granted me a $20,000 allowance to use as I wish to relocate with my new job. I stayed in hotel every week for 7 months until I found new home. Every week I drove 3 hours to new job and drove back home on Friday, I turned in expense report for hotel, gas (drive back home) and meals, Employer reimbursed me on my check but was not taxed.
Now 7 months later after I moved, employer is wanting to charge me payroll tax or give me 1099 for the reimbursed money.
Breakdown:
3,000 meals
9,500 hotel
1,300 gas
1,000 Uhaul/mover expense
total reimbursed $14,800

Is it best this is reported on my W-2 or pay the taxes now? Also is all of the reimbursement considered taxable?

Appreciate any help!



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Old 10-23-2015, 03:59 AM
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Join Date: Oct 2010
Posts: 5,227
Hi
My employer granted me a $20,000 allowance to use as I wish to relocate with my new job. I stayed in hotel every week for 7 months until I found new home. Every week I drove 3 hours to new job and drove back home on Friday, I turned in expense report for hotel, gas (drive back home) and meals, Employer reimbursed me on my check but was not taxed.=======aslongas your ER sets up and maintains an accountable plan, your travel expenses do not have to be treated as taxable income on your return.So your ER doesn’t report the reimbursed expenses on your W2, then you do not need to report it as income on your income so you do not claim the expenses on your return either.


Now 7 months later after I moved, employer is wanting to charge me payroll tax or give me 1099 for the reimbursed money.
Breakdown:
3,000 meals
9,500 hotel
1,300 gas
1,000 Uhaul/mover expense
total reimbursed $14,800======> OMG! He gave you a 1099 for the reimbursed money????. I guess this is wrong UNLESS you are a W2 regular EE. I think that you are a regular W2 EE so you do not receive a 1099 from the ER.I guess the ER gave you a 1099 so that he can avoid paying Soc Sec taxes for you; ERs have numerous payroll tax withholding and payment obligations. Of the utmost importance is the proper payment of what are commonly known as FICA taxes. FICA taxes are somewhat unique in that there is required withholding from an EE’s wages as well as an ER’s portion of the taxes that must be paid. A 1099 is not for you as you are a regular W2 EE, so the ER needs to report it on your W2 under non accountable plan.

Is it best this is reported on my W-2 or pay the taxes now? =======>Correct. As mentioned, UNLES you are an independent contractor, you need a W2 NOT a 1099. Plz contact your ER and let him know that you are a regular W2 EE, NOT a contractor, so you need a W2 NOT a 1099.Aslongas he reports the reimburses expenses as your income , he MUST report it on your W2 as taxable income for you.

Also is all of the reimbursement considered taxable?========>Yes As a regular EE, you need to receive a W2 from your ER NOT a 1099. Then you can claim your expenses on form2106/2106 EZ and on Sch A of 1040; this means that UNLESS you itemize your deductions on your return, you CAN NOT claim your expense on your return. I now know that your ER applies non accountable plan on yur expenses.
Amounts paid under a nonaccountable plan are income to you, an EE, and must be included in wages with appropriate tax withholdings. So he gave you a 1099 so that he can avoid paying FICA taxes for you. If it is still unclear whether you are an EE or an independent contractor, Form SS8 can be filed with the IRS. The form may be filed by either the business or you . The IRS will review the facts and circumstances and officially determine your status.



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