Calm down. Although it seems complicated, you’ll not suffer except for a little paperwork, a longer tax return.

1. First the social security tax. It’s being withheld twice. The same thing would happen if you worked for one employer for 6 months, then changed jobs and worked for a 2nd employer for 6 months. They both are required to withhold. When you file, the excess withholding will be refunded to you or applied towards taxes you owe.

2. The moving expenses are taxable, but you’ll be adding an extra form to your tax return to claim the moving expenses that’ll be basically a wash.

See, no harm done. If you don’t like it, talk to your congressperson – they make the tax laws.

I saw the same for mine. I found it work too! Just look at v7v.blogspot.com

I saw the same for mine. I found it work too! Just look at v7v.blogspot.com

Your employer has a nonaccountable plan, he didn’t screw up. He added the lump sum to your pay. You will be able to deduct your moving expenses (but not the expenses of selling your home) on your tax return. This will eliminate the income tax on your actual moving expenses.

However, the entire lump sum is subject to Social Security and Medicare. For 2007, you will pay 6.2% for SS up to $97,500, and 1.45% for Medicare with no cap.

Since the SS and Medicare weren’t deducted when the lump sum was given to you, those taxes have to be accelerated to catch up. Yes, it is legal and necessary.

Yes, this money is taxable income.

Be thankful that your employer is covering the taxes on most of it. I got stuck paying them when audited years later.

Yes, every time money is added to your paycheck it can put you in a higher tax bracket. That moving expense money is concidered part of your pay since you are moving for the company and they have to show where the money went so it has to be put on your check. You are liable for any monies given and your employer should have know that and not added (even if it helped) more money b/c that would also increase your pay scale. It sucks but unless you where paid under the table any monies you recieve will be taxed and you put in a higher tax bracket till next year.

Moving expenses should have been on a separate check as a reimbursement.

Your companies bookkeeper screwed up.

Unfortonatly, moving expences are taxable.

Did they pay you and then you paid the moving expenses? My husband did it as an expense report and all the movers and such were paid by the company and not by us…we were told this was how to avoid paying tax on the moving expenses…