I recently received my relocation bonus. The amount was $4800 ($7500-$2700(tax)).

I did not relocate anything so I have no recipts. I did however rent a car to drive to the new location, and then another that I used for almost 2 weeks before I bought a car.

Please let me know if and how I can get as much of that $2700 back that was withheld as tax !

Hello joe:

You treat it the same as the income tax that's withheld from your regular paycheck. If, on your annual tax return, after you've taken your deductions (rental car included), you find that you have a balance due, they'll send you a refund check.

If you find that your employer is withholding too much of your check, then you need to reduce the number of exemptions you filled in on your W-4's when you were hired. Your HR department will be happy to oblige you.

excon

I'm confused as to what this bonus was for. Companies will pay to cover an employee's relocation costs. Generally such programs involve submitting recipts for the costs involved (house hunting, moving, etc.). Frequentally, companies will "gross up" the amount so the net you receive covers the expenses.

In other cases, a company might pay an employee a lump sum as the result of a relocation that is designed to compensate for changes in cost of living between the 2 locations. This could be in place of or in addition to the actual costs of relocation. This is considered compensation the same as your salary and taxed accordingly.

So if you can explain what this $7500 was we may be able to help further.

I had 2 options for handling relocation:

1. I could send in the recipts for costs. These amounts would be deducted from the $7500. Tax would then be withheld from the remainder and I would received the rest as a check.

2. I could just take the entire amount as a check. That would be $7500 less taxes.

I chose the 2nd option, as I did not really relocate anything, thus no recipts, and received $4800 as a check.

I'm still confused. Why would they pay you a relocation bonus if you didn't relocate?

I did relocate.

I did not own anything to take with me except clothes which I packed into a suitcase and took with me in the rental car.

Thus although I relocated... I had nothing to "relocate".

But you DID have something to relocate, yourself. Since you chose Option 2, you can deduct your moving expenses on your tax return. However, since, as you admit, this was not much and you don't have much in the way of receipts, then there won't be much to deduct.

So I don't see you getting very much of that money back.

I'm curious, though, where were you living that you had no belongings. Did you move into a furnished apartment? If not, did you buy furniture? Did you have to break a lease to move? There may be lots of other things that might qualify as relocation expenses. If we knew more about your situation we could advise further.

I am a US citizen who lived abroad till I was 18. I came to the US for college with nothing except some clothes. In college, I accumulated a few things like a T.V. sofa, etc... but sold all of them when I graduated.

When I got a job, in another state, I had nothing left except clothes.

I moved into an unfurnished apartment and thus spent most of the money on furniture and the rest on initial groceries etc... I did NOT have to break a lease to leave.

So you weren't working for this company initially, you were hired out of college and paid the bonus for relocating. I'm afraid there isn't much you can do then. You might be able to deduct the expenses of setting up house, but I doubt it. The only sure deductible expenses, is the cost of the rental car to transport to the new location, including a mileage stipend. Any expenses you incurred in finding the apartment might also qualify.

Under current tax law, the only expenses you can claim for a move is the movement of personal effects (HHGs, car) and the cost of the actual move (lodging during the move, mileage at 22 cents a mile, and the cost of storing the HHGs).

Thanks to all for the help.

Glad to help!