The new tax reform has something new for the tax payers in 2018. There have been considerable changes in the policies and now relocation benefits received by the employee will be charged on new terms. An important aspect which the employee has to face is the change in norms of relocation tax deduction.
During this time when the lifestyles of people all over the world have advanced, people are opting for relocation due to various reasons. These reasons include a new job, a better lifestyle option or due to any personal reason. Whenever you need to relocate due to a new job there should be a detailed discussion about the relocation package being offered to the employee by the employer. There are various kinds of reimbursements which are included in the relocation package, which the employees should be aware of. Till 2017 the benefits received by the employee under relocation package was not taxable even if it was excluded from your income. But from January 1, 2018 if anyone relocates due to a new job and he/she gets a relocation reimbursement, the income will be taxed. It means this income won’t be deductible from taxes and will be included in the total taxable income.
However, there are various other factors which are considered in the terms updated for relocation tax deduction 2018. These norms have been framed from the period between 2018 and 2025. It means if you have relocated in 2017 and you qualify you are eligible to claim the expenses of tax return that you might have filed in April 2018. If you move in 2016, then also you become eligible to apply for tax deduction under some terms and conditions.
However, whatever the new policies and rules depict, your ultimate aim should be taking advantage of the allowable tax deduction in case of relocation. You need to know, what types of income qualify for deduction and which all do not qualify.
First, you need all incomes that qualify for tax deduction; these include expense packing and moving of your household items and personal property. The cost of travelling and lodging are also included. The expense for meals is not included in his/her income. There are some clauses which are applicable for considering the expenses of moving which are given in the new policies. It means that it does require itemizing it separately if you wish to claim it. This deduction can be claimed along with the other standard deductions. There are three various levels of tests which decide who all are eligible for claiming tax deduction and you should qualify them all.
The Urban Bound relocation services can provide you with all the details which you need to know about the relocation services, packages and eligibility for tax deduction. It also keeps you updated with the new norms and policies which are applied and amended with each New Year. You can take help of the Urban Bound relocation services if you want to claim tax deduction or simply relocation package.