Author Topic: Relocation Lump Sum and Tax Impact  (Read 919 times)

KzooKendrick

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Relocation Lump Sum and Tax Impact
« on: August 11, 2015, 08:11:07 PM »
Hey everyone,

I recently relocated in January and was given a lump sum by the third-party relocation company. I'm trying to figure out how to plan for this come tax time.

Overall, I received a check for a flat dollar amount that already had the taxes paid for on my behalf (either by the third party company or my own) - either way the taxes are already paid for.

In terms of my 2015 taxes, I'm assuming that since this was a lump sum that I'll receive a W-2 at the end of the year from both my company (regular salary) and the third party relocation company (relocation). The relocation W-2 should show the gross amount as well as the taxes that we're "paid".

Am I thinking about this correctly? If so, I plan to take the moving deduction for all my moving expenses that meet Publication 521 - Moving Expenses.

Thanks in advance!

MDM

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Re: Relocation Lump Sum and Tax Impact
« Reply #1 on: August 11, 2015, 09:03:18 PM »
Am I thinking about this correctly?
Yes.

If the lump sum was considered "supplemental wages" then the federal withholding was probably a flat 25%.  Might be worth a quick estimate of your 2015 tax situation now to see if your regular paycheck withholding could/should be changed.