Relocation Reimbursement being reported as income

Amazon
hsgQ15

Go to company page Amazon

hsgQ15
Mar 5 21 Comments

In 2021, I sold my home and moved to a different state and Microsoft helped with my relocation.

For the agent's commission for selling my home, I paid from my after tax money. MS reimbursed this money but reported this amount as income on my W2.

Because of this I am owing a big chunk of money to the federal.

How can I claim that this is not a regular income and claim it on my deductions. I don't have any documents. Should I contact MS to update my W2? At big companies like MS, shouldn't there be a standard process to fix this?

Blind tax: 220k
Yoe: 3

#tax #irs #relocation

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TOP 21 Comments
  • Plaid
    !i!i

    Go to company page Plaid

    !i!i
    It is income
    Mar 5 3
    • Why do you think it wouldn't be income? The fact that you fronted the money is irrelevant, since ultimately it came from a third party. If it's not income, do you think it should be coded as a gift, or as some pseudo health benefit? Ultimately it's income because it's a benefit to you.
      Mar 5
    • Plaid
      !i!i

      Go to company page Plaid

      !i!i
      Yeah no, I understand what occurred. Microsoft gave you cash. This is income. Think of it as a cash bonus. How you spent it isn’t really a concern to the IRS.

      Real estate agent commissions aren’t deductible expenses against income. Though they may play into any calculation of taxable gain you have on your old home.
      Mar 5
  • New
    LoveMyMama

    New

    LoveMyMama
    Reimbursement to an employee is never supposed to be reported on W2. I work in Finance/Accounting.
    Mar 5 2
    • Plaid
      !i!i

      Go to company page Plaid

      !i!i
      Section 11048 of the Tax Cuts and Jobs Act suspends the exclusion for qualified moving expense reimbursements from employees’ income for tax years beginning after December
      31, 2017, and before January 1, 2026.

      What kind of job do you have in finance and accounting? Hahahahaha
      Mar 5
    • Amazon
      YesMyAck

      Go to company page Amazon

      YesMyAck
      Trump only cares about top 1%.
      Mar 5
  • Due to tax law changes in 2018 by Trump, this is treated as income. Some companies gross up when they reimburse to compensate.
    Mar 5 1
    • Investment Bank
      Glinda

      Investment Bank

      PRE
      HP
      Glinda
      Most relocation expenses have always been taxable, decades before Trump. I have had 6 corporate moves over the past 30 years so understand the tax consequences. 100% of the company's involved provided a tax adder to compensate.
      Mar 5
  • Intel
    not it

    Go to company page Intel

    not it
    Only option would be for MSFT to pay the tax for you, but then the money they give you to pay that tax would also be income and then you would owe tax on that and so on and so on... Pay your tax and move on
    Mar 5 1
  • Investment Bank
    Glinda

    Investment Bank

    PRE
    HP
    Glinda
    Most companies give you a tax adder. When we had a Microsoft relocation, taxes were covered. Be sure and fill out tax schedule 3903, Relocation Expenses.
    Mar 5 1