Hi,

I have relocated to the USA on September on an L1 visa. My company has paid part of the relocation cost in a flat sum ($5000), but there were additional costs beyond this value that I covered myself (additional $3000 or so).

I am not supposed to pay the income tax on the flat sum. I just received my 2006 W-2 and earning summary form and it is consistent with them paying 33% above the flat sum and deducting the 33% as taxes. So far, so good.

My question is about the additional costs I have covered myself.

- Can I deduct these additional costs?
- If I can, how do I present this on my tax form?
(The invoices are for the total sum, as is my W-2 form, so I'll need some way to document the fact my company paid for part of it and I paid for the rest).

Thanks!

Your relocation fee was taxed, so you CAN claim moving expenses.

You can deduct the cost of storing and moving your personal effects (household goods, baggage, etc.). You can deduct the cost of moving yourself and your family from old to new location. You can cost the lodging costd of the move. And that's all you can claim.

You document these costs on Form 3903, and file it with Form 1040.

If you need my professional tax help, contact me at [email protected].

The $5k was taxed, the additional $3k wasn't - does that mean I can only claim the first $5k, the whole $8k, or just $3k I paid myself?

You also hint that I may be able to claim the hotel bills I paid for the first few days until I moved into a rented house. That would be sweet :-)

Thanks,

Oren Ben-Kiki

You can claim only ONE day of the hotel bills.

I guessed deducting the whole week was too much to hope for...

But I can deduct the whole $8k of actual mover expenses?

No, you have to factor in the untaxed reimbursement on Form 3903.

There wasn't any untaxed reimbursement... I was reimbursed on part of the costs ($5k out of $8k) and this was taxed (I was actually given $5K + 33% and the 33% was paid as taxes).

If I understand you correctly, I can simply treat the two as unrelated. I had a higher income (by $5k + 33%) - this is already included in the W-2 form so I just need to copy the numbers from there; in addition, I can simply claim the moving expenses (using the movers invoice I have). Makes perfect sense when you think about it.

Thanks for your help!

Oren Ben-Kiki

You got it right!

Just claim the moving expenses on Form 3903.