Has your company provided you an upfront lump sum in order to help cover your expenses related to your corporate relocation? Some jokingly call this a "buck and a truck" or a "grand and a van", but managing your own corporate relocation is no laughing matter. You have a new job waiting for you and a start date in a new city, but there are many tasks ahead of you. Where do you start? Well, we can help. Whether you need to provide multiple bids or simply select your own moving company, get one on your side that works with corporate transfers every day. From setting your budget and providing you with a realistic plan, we know what employers expect when it comes to relocating employees. So don't get caught off guard with an unsavory or incompetent moving company. With our global network of over 1,000 North American Van Lines and Allied Van Lines agents, we can get you where you're going and get you there in First Class.
Rogue or incompetent movers can wreak havoc on any relocation, but have a deeper impact on corporate relocations where your new job expects you to be on-time, focused and ready for your new life in a new destination. As an agent of North American Van Lines, we have the global clout to get your belongings to any corner of the world safely and in a timely manner. As a member and a Certified ProMover of the American Moving & Storage Association (AMSA) and the Employee Relocation Council (ERC), First Class meets all the necessary criteria to service your corporate relocation with efficiency and security. The ProMover credential is administered by the American Moving and Storage Association (AMSA). This industry organization is dedicated to assuring the integrity of home-moving professionals and the well-being of their customers. Steer clear of any moving company that does not carry the ProMover designation.
Know Your Tax Situation
Unfortunately lump sum payments for relocation benefits, including household goods moving are taxable to the employee as earnings. This is because some employers structure their relocation program to cover costs for taxable moving expenses, such as house hunting, temporary living, etc., and then reimburse the "non-taxable" expenses. Under the current tax code, the lump-sum reimbursement amounts are fully taxable to the employee, and depending on the company program, either the company or the employee would ultimately bear the associated tax cost of including these amounts in the employee's wages. Other companies have structured their lump-sum program to cover all relocation expenses. If the company uses this method, the lump sum would be fully taxable to the employee.
While some employees receive a "gross up" or tax assistance from their employer, in order to provide the full recommended amount for moving, some do not. This creates a dilemma for the transferring employee because there often isn't enough funds to cover all relocation-related expenses after 40%-45% goes to taxes. The employee should be instructed to track the "non-taxable" expenses, as a claim for a qualified moving expense deduction on their U.S. federal individual income tax return. The applicable moving expense amount would then be a reduction to a taxpayer's adjusted gross income (AGI).
If given a lump sum payment, the employee's income could be increased enough that it places them over the threshold of a higher tax bracket which will cause the employee to have to pay more in taxes for all of their wages and not just the amount tied to their relocation. In addition, a lump sum payment that goes onto an employee's W-2 may elevate the employee over the threshold to be subject to the new Medicare Surtax of 0.9% as required by the Affordable Care Act. While the income subject to tax under these new provisions is different, there is an overlap in the definition of taxpayers subject to these new taxes. The Medicare Surtax of 0.9% applies to individuals who have modified adjusted gross income ("MAGI") in excess of certain threshold amounts: $250,000 in the case of married taxpayers filing a joint return or a surviving spouse; $125,000 in the case of a married taxpayer filing separately; and $200,000 for everyone else.
Direct Billing Option
Payments made directly by your employer for household goods moving services do not need to be reported on your W-2 or IRS 3903 form. Therefore, if your company arranges for a no obligation, direct billing arrangement with First Class, it will eliminate a tax nightmare for you and your employee. Direct billing also allows for free $0 Deductible, Full Replacement Valuation Coverage in the rare case of loss or damage, it also allows for priority dispatch and van assignments to our top quality drivers. So move forward into First Class with our Business Class Corporate Move offering. Ask your Move Coordinator how!