If you have a relocation package with your new employer, there are a number of possible components that can impact your move, and that you should check on.

Read:

Does Your Relocation Package Include an Equity Loan? and

Does Your Relocation Package Include a Buyout?

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Another item that may be covered in your relocation package are CLOSING COSTS.

You might have these paid for on the sale of your home, but perhaps also at the buy side of the transaction. Check to see if either is the case, since this may have an impact on what you negotiate for on the sale or purchase of your home. It may also impact what you can afford.

For example, some sellers will offer to pay a portion of your closing costs when they counter offer YOUR offer. This doesn't do you any good if you are getting the closing costs paid for. So something else might need to negotiated as part of your agreement to buy the home which can be to your benefit, say a lower price.

Knowing ALL the details of your relocation package is critical so you are prepared.

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First, let me say that I am not a tax expert and I cannot advise anyone on the tax implications of relocation, especially if you are using a relocation package from your new or current employer. I can only share what I have learned from my personal experience.

If you are receiving some sort of relocation package, my best advice is to consult your accountant so you will fully understand how your relocation package may be taxed and when. You don't want to be shocked on April 15 when you find out how much more in taxes you owe. You probably should do this before you even accept the relo package in case there are issues that you need to resolve. The money you receive, either directly in the form of a lump sum payment which some employers offer, or a reimbursement for actual expenses, may become part of your overall income and show up on your year-end W-2 in one form or another. You need to know how this money will be treated by your employer (the payroll department can probably help here) and how this may impact your tax return for the following year (chat with your accountant).

There is a good reference on the IRS website about Moving Expenses that I have used in the past, as well as the required form for 1040 filing - Form 3903 for filing expenses/deductions and associated instructions, and Publication 521 on Moving Expenses.

Keep careful records of every expense associated with your move from start to finish in a separate file for tax time, every document you sign, every expense form you complete for your employer of the relocation company (if applicable). Track your mileage carefully. The IRS has a limit on when you can deduct mileage and when not, depending on how far the move is. While there is a deduction for moving household goods (e.g., a receipt from the moving company) there may be limits depending on your situation. There are also IRS restrictions on the costs of transportation to your new home (especially food). Again, records are essential so you can correctly figure your rightful deduction but also be prepared in case of an audit.

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