A fixed amount of money is given directly to the employee to pay for the move and related expenses. For tax purposes, the government considers it income and is therefore subject to taxation, so to compensate for tax obligations, companies usually reimburse them in the form of a gross sum, which frees up the total amount of cash for the move. Another potential drawback is that it can be difficult to correctly estimate total costs in advance, due to unexpected out-of-pocket expenses. If the moving company's initial estimate is lower than actual costs, for example, the employee may have to cash out of their own pockets to cover the difference.
The Internal Revenue Service (IRS) defines eligible moving expenses as the reasonable costs of moving you and your belongings. This usually includes the costs of the move itself, storage and travel. Understanding the pros and cons between cost and convenience and focusing on the overall value and benefits of a well-executed move can help manage expectations and alleviate financial problems. During the move, you'll need to keep track of moving expenses, including moving supplies, fuel costs, truck rental costs, flight expenses, temporary accommodation, and restaurant bills.
However, if it's a complicated, long-distance move and you have money to spare, hiring a full moving service is the most efficient way to move. A local move usually takes place within 100 miles, while a long-distance move in the United States can last more than 3,000 miles. A person moving into a single-level home with a wide driveway will likely have a shorter move than someone who lives in a 20th-floor apartment on a busy city block. It's important to keep a detailed record of all your moving expenses, including receipts for packing materials, travel expenses, and any other expenses you incurred during the move.
While your actual moving expenses may vary, this range of costs should give you a good idea of what you can expect so you can properly budget for your move. If the move requires transportation by plane or train, standard packages usually include reimbursement for the cost of moving the transferee's vehicles. This option costs more, but it's also the easiest solution for longer or more complicated moves. If your move requires short-term storage, be sure to ask the moving company how much they charge for storage in transit.
Whatever you do, be sure to carefully weigh the pros and cons of each choice before deciding on a method of movement. You can also calculate how much it might cost you to tip the moving company; omitting that expense could be a budgetary error.
