Relocating

I am a few months out from my first PCS CONUS to CONUS. I found out I am eligible for HHT and other entitlements and I want to get a handle on what my taxes I have to pay will be. Also I can't seem to find any real helpful info on WTA and RITA and I do not understand how it can repay tax burdens if it is taxed as well. Wouldn't that count against me if it pushes me into a higher tax bracket?

Also has anyone looked for CPA's with knowledge on PCS moves within the gov?

allday721, I could not help but chime in here. When I had the PCS move done through the DOJ (which may be similar to the DOD), at first I had the same reservations and fears about tax burdens and my tax brackets, etc....
However, when it was all said and done, taxes filed, I'll tell you that I was pleasantly surprised; that it worked out well!

My biggest advice to you here: " if you a simple PCS move (see below) then don't over think the whole process & calculations too much".

So let me give you my example here....I PCS'ed from mid-west across to a state 950 miles east. And the entire cost of PCS is all taxable income as you know. If my relocation costs were 20,000. The DOJ reloc. specialist calculates roughly the taxes owed on that, say 8,000. So now my total amount to place into 1040 taxes is 28,000 (all taxable income). However, what I was pleasantly surprised to see was that relocation W2 already had the withholdings in it (this is the figure that you add along with your regular W2 for federal/state income taxes withheld; kind of like an offset), meaning I was not going to write a check for additional tax incurred due to that 28,000 (additional to taxable income). Yes, there can be a scenario where you may owe a small amount, small though, because they normally use a 2% withholding rate for state taxes, and some states have much higher state income tax rate. In my case I was moving to a state with a much higher state tax rate than 2% and I knew that well in advance. To counter it, I was already making higher state tax withholdings for the biweekly pay periods (via the state W4 form).
Then the following year, that reloc. specialist will contact you again to "settle the RITA"; again a new, but much smaller taxable income will be generated, but like before, the withholdings will already be included! So you add the RITA amount to the taxable income, and the withholding from it to the taxes withheld section, and it all evens out.

In my case, and I imagine in most cases, people come out "on top" with a full PCS move.

I am aware that with some PCS moves, some people will have home sales (via the home sale program), or temporary lodgings, even have HHGs temporarily stored for a certain period of time. In such a case the entire PCS move may be generate a huge taxable income, but then it will also generate a much larger withholding amount to offset it! But I can imagine that such a large taxable amount being added in can push someone to the next tax bracket.

My above experience was for a typical PCS move that did not involve a home sale, temp lodgings, or HHG storage. It was a quick and easy move. If I did have a home, I had the option to sell it myself, and then the selling expenses could be refunded to me, up to a certain amount, as a part of the PCS move (which would increase the PCS cost, but also the withholding amount offset).

Hope it helps.

Under the terms of my appointment, I was due to receive PCS to return to home station and retire. The Army begged to differ. I moved myself and paid for it myself. I intend to deduct the cost on next year's taxes, as a DOD employee. Make very sure that you take no steps without written authorisation from your agency.

You're likely to get much better results by appealing to the Civilian Board of Contract Appeals https://cbca.gov/ which has jurisdiction over relocation and transportation issues for Government employees including DoD civilians.

Take some time to review their findings, you're sure to find cases that match your own circumstances. Filing an appeal is simple, can be done electronically, needs no lawyers or fancy Latin language, and they rule quickly and fairly.

Making up your own tax law rarely works out well. I was on active duty with a guy who, figured that since he was paid by tax dollars, and he himself paid taxes, that he could consider himself self employed for a portion of the year... Yeah, I wonder how that worked out for him.

BOP did you use WTA at all? My situation is the opposite as I am PCSing from the east coast to a location about 850miles away in the south where the state income tax is less than what I pay now. Did you have to pay anything out of pocket before the RITA was deposited the next year? Did you add any extra withholding in your checks or was the relocation automatically taken out? I am probably going to have as much withheld as I can afford for the next couple of months until the move just to be safe then worst case I'll get it back in a refund check.

I believe it is the same process for the DOD. You follow the JTR or FTR right? Did you get a second W2 for the relocation or was it just 1 W-2? Did you have to amend anything with the IRS?

I have not fo e a PCS under new tax rules...

If agencies are doing it as the raw costs of the move is say $15,000 thrn the adjust the amount paid to you is full cost+ tax burden there shouldn’t be that many issues. If worried you can have more taxes withheld prior to the tax return ftom the pay check.

The piece you need to plan for is money are you tend for the actual moveof hotel and food costs at leaving site, travel move, hotel and meals at new site before you can move into new place.

If you don’t have that cash you need to see about getting an advance.

IF Dems have full control next year I see this getting restored in tax return with all moving expenses being tax deductible

allday721,

I did not have hotel stay since I drove the entire trip in one shot. I didn't have nor did I use a Govt credit card.
At the end I remember filling out a sheet of my drive, start date/time, odometer reading, and then end date/time with odometer reading, so that I could be paid for mileage....the other nominal costs were covered in the per diem rates.