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There is a surprise for job hunters in the tax code if you are relocating for a new job. I walk you through the consequences to you.
Taxes. Taxes. Taxes have changed in the United States in many respects, they are better for individual taxpayers but they have clearly changed and become more expensive if they have that you are relocating for a new job. For years, if you or in a situation where you are moving to a location 50 miles away from your current home, and you are paying your own relocation, that was deductible, whether or not you or itemizing or not. The new law passed under Pres. Trump has changed that and it's useful for you to know this so you can make plans for it. Otherwise, you could be hit with a big surprise. That deduction no longer exists. You may think to yourself, “well, I'll have the employer pay for relocation.” In the case where employers pay for relocation, there's another little surprise there. Weight tell you hear this one! The money that is paid to relocate you is now taxable. Catch that one. If you're receiving $5000 . . . $10,000 from an employer to relocate, that's now taxable income to you. Unless you save money somewhere along the line or receive a sign-on bonus in addition to compensate for that difference, you are going to be having a big surprise when it comes time to file your income taxes. So, don't be surprised. Work this into the equation. Talk with the firm that is going to relocate you about a sign-on bonus to compensate for the fact that you now have taxable income. Now, understand that sign-on bonus is taxable as well, but at least it will minimize the impact of the relocation money. So, don't get surprised. Plan ahead and maybe you can find something close to home.
