allowance=a general compensation the employer paid to employee based on reasonable estimated.
reimbursement=the actual amount the employer paid to u for all ur actual expense
1)if the allowance for ur moving the employer paid u is $2000,but u actual expense is 1500,then u have to include 2000 in ur income and deduct 1500 expense incured,which means u have to pay the excess 500xtax rate.
2)if the allowance the employer paid to u is 2000,but u actual expense is 3000,then u have to include 2000 in ur income and u can deduct 3000 expense,which means u can creat extra expense,and u can pay less tax.if the expense is more than the income u earn this yr(it could be happened,in case u start to work DEC.this yr for the new company),the extra moving expense can be carried forward for future yr(this is the best situation for u)
3)if the amount paid from employer is exactly the actual expense u paid for moving.then u don't have to include these amount in ur income,of course,u can't deduct any expense for the tax purpose.
also,remind u that moving expense can be included the following:
*travekubg costs
*the cost of transporting or storing household effects
*the cost of meals and lodging for the taxpayer
*the cost of canceling a lease on the old residence
*the selling costs of the old residence
*the legal and other costs associated with the acquistion of the new residence
*the costs of revising legal documents to reflect a new address....
i guess that is the best i can do for u,i started to work in a small accounting firm 2 mons ago since i need 2 yrs working experience to get my license.i have 3 assignment due next week,which drives me crazy.i have to say the best for u is finding a tax consultant.trust me,u will get more than u pay.i claim 2000 back to one of my client who thought he has to pay 150,000 this yr.see the difference?speacially if you are a self-employee or contractor or an employee who earns income base on commission.they can get much more deduction than they think.i hope this will help u .good luck!
reimbursement=the actual amount the employer paid to u for all ur actual expense
1)if the allowance for ur moving the employer paid u is $2000,but u actual expense is 1500,then u have to include 2000 in ur income and deduct 1500 expense incured,which means u have to pay the excess 500xtax rate.
2)if the allowance the employer paid to u is 2000,but u actual expense is 3000,then u have to include 2000 in ur income and u can deduct 3000 expense,which means u can creat extra expense,and u can pay less tax.if the expense is more than the income u earn this yr(it could be happened,in case u start to work DEC.this yr for the new company),the extra moving expense can be carried forward for future yr(this is the best situation for u)
3)if the amount paid from employer is exactly the actual expense u paid for moving.then u don't have to include these amount in ur income,of course,u can't deduct any expense for the tax purpose.
also,remind u that moving expense can be included the following:
*travekubg costs
*the cost of transporting or storing household effects
*the cost of meals and lodging for the taxpayer
*the cost of canceling a lease on the old residence
*the selling costs of the old residence
*the legal and other costs associated with the acquistion of the new residence
*the costs of revising legal documents to reflect a new address....
i guess that is the best i can do for u,i started to work in a small accounting firm 2 mons ago since i need 2 yrs working experience to get my license.i have 3 assignment due next week,which drives me crazy.i have to say the best for u is finding a tax consultant.trust me,u will get more than u pay.i claim 2000 back to one of my client who thought he has to pay 150,000 this yr.see the difference?speacially if you are a self-employee or contractor or an employee who earns income base on commission.they can get much more deduction than they think.i hope this will help u .good luck!
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