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Quick Advice About Your Relocation Expenses

Quick Advice About Your Relocation

Whatever your reasons for relocating are, here is some quick advice about your relocation. Let’s dive right in!

Are relocation expenses taxable?

The short answer is yes. Relocation expenses are taxable and here’s what the IRS has to say about it: 

“For tax years beginning after 2017, you can no longer deduct moving expenses unless you are a member of the Armed Forces on active duty and, due to a military order, you move because of a permanent change of station.”

So what does this mean? It means that if your employer is not assisting you with relocation expenses then you’re going to end up eating the cost to move. Unfortunately, yes, the IRS says that your relocation expenses are taxable. 

Are relocation expenses deductible?

Again, per IRS.gov., relocation expenses are no longer deductible. This policy has been in effect since 2018 and will last until 2025.

Are relocation bonuses taxable?

Unfortunately, since 2018 and through 2025 all expenses and bonuses are taxable in regards to relocation whether through an employer or not. If you received a bonus to relocate after 2018  that bonus will be taxed at the end of the year. Even if you received a reimbursement instead of a bonus that money is still taxable to the employee, or rather, you. 

“Per a transition rule in the new law, reimbursements an employer pays to an employee in 2018 for qualified moving expenses incurred in a prior year aren’t subject to federal income or employment taxes. The same is true if the employer pays a moving company in 2018 for qualified moving services provided to an employee prior to 2018.  To qualify, reimbursements or payments must be for work-related moving expenses that would have been deductible by the employee if the employee had directly paid them before Jan. 1, 2018. The employee must not have deducted them in 2017. For more information on the 2017 rules, see Form 3903, Publication 521, or the FAQs for Moving Expenses”. 

Can relocation costs be capitalized?

You can capitalize on the cost of shipping and to set up your business or to ship materials for your job however you cannot capitalize on the cost of Labor to perform those actions.

How relocation packages work.

A company might offer employment to someone that isn’t local to where their job duties will be fulfilled, in this case, the company may then offer what is called a Relocation Package to help with the costs of moving.

What relocation packages include.

Relocation packages include (but are never limited to), mortgage payment assistance, language learning, transportation, moving costs, temporary housing (such as a hotel or Air BnB),  packing and unpacking household goods, and much more. 

How much relocation bonus is needed to move to Idaho?

In order to best answer this question we would need where you are moving from so to provide as much valuable information as possible we will break down moving from Miami, Florida to Boise, Idaho (probably the furthest city from Boise in the US) totalling about 45 hours of driving time.

Trust us if you can learn how to relocate from across the country, you can relocate from anywhere!

Miami sits 2,833.46 miles from Boise while driving, or 2,358.39 miles while flying.

As a baseline and to provide context, a company recently charged $415 dollars to ship a wooden rocking chair 2,358.39 miles from Hastings, Nebraska to Los Angeles. Coming in at a rate of $5.66 per mile for one item.

For the following we will assume that you are single and traveling alone.

quick advice about your relocation

Before even adding any other multitude of relocation costs you can see that if we ship all our belongings from Miami to Boise it gets very pricey.

The costs for your relocation will vary which is why we took such an extreme distance such as moving from Miami, Florida to Boise, Idaho.

According to Shyftmoving.com

“An average relocation package costs between $21,327-$24,913 for a transferee who is a renter and $61,622-$79,429 for a transferee who is a homeowner.

Of course, this number is just an average of what larger corporations are spending on employee relocation – the relocation amount can be anywhere from $2,000 – $100,000”.

Although we know that costs vary trip to trip, we hope that the breakdown was beneficial. If this cost breakdown and the resources provided helped you when considering a move to Idaho, please let us know at info@treasurevalleydave.com

We also interviewed a moving company that specializes in moving from California to Idaho.


Why are Relocation Expenses taxable?

While we don’t have a solid answer to this question, we would invite you to consider the amount of people that started leaving blue states in 2019-2021. To say it was a coincidence that this law went into effect just a year prior to the Covid 19 Pandemic and the slew of policies that followed might be an insult to the word coincidences itself.

Read more about the number of people fleeing blue states right here.

Can relocation cause depression?

The short answer is yes. It’s well known that just about any life change whether positive or negative can cause depression. But what is it about moving that can cause depression? Why is relocation stressful?

Here’s just a few things:

  • Leaving behind memories and relationships
    • Millions of memories are built in a home and selling that home can internally “sever” the connection to those memories. 
    • We are social creatures and most likely you’ve developed relationships that have made you feel safe in your current environment. Internally, leaving those relationships behind exposes you to potential unseen harm. (even though it’s never guaranteed you will have a bad experience just because you moved)
  • Starting a new job
    • The first day at a job is always nerve wracking. You have to perform well, make a good impression, meet new co-workers, and adapt to a plethora of other changes in a new work environment.
  • A new location
    • Commuting can add a level of stress whether your commute is increased or decreased-it doesn’t matter. You have grown accustomed to your internal clock that was okay with sitting in the car in endless traffic (or at least tolerated it), when that time spent commuting is stripped from you, there;s more freedom, but there’s also finding ways to fill it!

Can relocation help depression?

You might read the above and think “well, I don’t want to relocate! It sounds miserable!” Please don’t misunderstand. Relocating can and does provide a big change in quality of life especially when moving from a heavily regulated state like California to a free state like Idaho. 

We’re not doctors, and can’t tell you what to do for your mental health. But what we can tell you is that starting fresh in a new area can open a new chapter of life that will bring so many opportunities that you never realized were possible. Don’t take it from us though! Check out this family’s relocating experience

Why relocation makes you independent.

Everyone has their own reasons for relocating. When it comes to independence, maybe everyone in your family lives in the same area and you just want to get away. Maybe you were told that you’d never amount to anything so you go on a journey to prove those critics wrong. Relocation is not easy, in fact, it’s actually quite challenging. However, like many other difficult things we do during our lives, there is so much that relocation can teach you. 

Relocation really is a restart to your life. It provides a reset that maybe staying in the same area wouldn’t provide. Take all of your experiences you’ve had in your current area. Consider the person that you’ve become. Who people think you are or what you are like. When you move to a new area you can change all of that, especially when no one in your new location knows who you are. You are able to change everything about yourself and no one can say a thing about it. So, it goes without saying, relocation is good.

How long does relocation take?

The length or duration of a relocation process really is up to the person relocating. However, getfairhomeoffers.com says to allow for around 2-4 weeks. Plan for the latter end of 4 weeks if you don’t yet have permanent housing figured out for your new location. The travel time itself depends on whether or not you are flying or driving and if you are sightseeing along the way. If your employer allows up to four weeks to make the change, and you are financially able, we suggest you take the four weeks so that you don’t feel rushed and you can not only ease into your new home but also your new job. 

When should you relocate?

Realistically, you want to relocate when the time is right. How do you know when it’s time to relocate? Maybe some self-reflection might help answer that question. Are you happy with your current job or living situation? Do you feel stressed all the time? Is the commute time to your job wearing you down? Think back to 2020, did your state put policies in place that you questioned? If that were to happen again, would you still like to be living where you were? Answer these questions honestly and you might think it’s time for a change – even if you weren’t considering moving already!

How do you relocate without a job?

Savings. Savings. Savings. You’re going to want a little nest egg saved up in order to give your relocation the best odds of success! If you don’t have a job when you move you’re going to want to have those extra funds available to be able to tap when those needs arise. 

You also need to start considering how you are going to start making an income as soon as possible. Right now in today’s job market you should be able to find something reasonably fast. Everywhere places are hiring. It may not be your dream job, but it might be just what you need to make ends meet. 

In Closing

Wherever you are in your relocation journey, if you plan to move to Idaho we can help. We have been able to get people interviewed for jobs, help them find temporary housing, and assist them as they learn more about relocating to Idaho and moving to the Treasure Valley. If you find yourself needing more information about moving to Idaho, please consider downloading our free relocation guide

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