In case you hadn’t heard, the new tax law eliminates the tax deduction for moving expenses and other job costs such as license and regulatory fees, required medical tests, and unreimbursed continuing education. The following relocation tips will help make sure you have a great moving experience under the new tax law.
If your next job (or your first job) involves relocation, you need to know these seven relocation tips for optimizing your moving experience.
- Involve your spouse early. Understand their “must haves,” from the smallest details of the move to big picture issues like their earning power in the new location. Two heads are better than one; they will think of things you have not.
- Compare the cost of living. With your short list of locations in hand, assess the long-term economic impact of living in those communities. How far will your dollars stretch? Websites such as Sperling’s Best Places to Live can guide you.
- Research your moving costs. There could be a wide cost variance, based on distance and the volume of items you’ll move. Get a no-obligation quote from a moving company to help you quantify this perk and substantiate the amount you seek in your relocation package. Even if the hospital simply includes a flat moving allowance in your signing bonus, you want to be sure your costs are covered.
- Get the reimbursement policy in writing. It should include a detailed list of what will or will not be reimbursed. Be sure you understand their definition of “reasonable” expenses – because that’s what counts when the check is cut.
- Use an approved relocation service. If the hospital has a direct contract with a relocation service, working with them will save you time and help you avoid out-of-pocket expense when cash is tight. Alternatively, the hospital may provide a list of approved movers that you must use to be reimbursed.
- Keep every receipt. Your itemized credit card bill probably doesn’t provide enough documentation for reimbursement. The original, detailed invoice and receipts proving payment may need to be submitted.
- Reserve enough cash to pay your taxes. To avoid an expensive surprise at tax time, ask a tax adviser how relocation reimbursement and other incentives will be taxed in 2018. Then, be prepared to pay Uncle Sam what you owe in 2019.
Which relocation expenses are typically reimbursed for physicians?
Items that may typically be approved for reimbursement:
- Truck or trailer rental
- Professional movers
- Amount paid for gas and oil for physician’s vehicle OR the standard mileage rate
- Parking fees and tolls
- Packing materials…boxes, tape, etc.
- Lodging expenses (reasonable)
- Airline tickets for physician and family members for one-way travel to new location
- Shipment of one personal vehicle
- Storage fees (30 days)
Items that are typically not reimbursable:
- Pre-move house hunting expenses
- Expenses of buying or selling a home
- Expenses of entering into or breaking a lease
- Temporary living expenses
Note: Starting in 2018, moving expenses are not tax-deductible. Consult a tax advisor about how reimbursed expenses may be taxed.
With this relocation guide, you can put your moving expenses and cost of living differences into context with your overall compensation package. For additional insight, see how your compensation compares across the country by visiting the Jackson Physician Search Salary Calculator and Resource Center.