Each New Year always brings many opportunities and challenges for all of us in business and in our personal life. The key to success is how we adapt and respond to change. In 2018, there are some changes that will impact your company when relocating talent in the US. Some of these changes will include the $1.5 Trillion “Tax Cuts and Jobs Act”, as well as the FMCSA’s Electronic Logging Device mandate for owner operators in the trucking industry.
In the book “The 4-hour work week” by Tim Ferris, he shares an email from a friend that reminds me of the best approach when facing any new changes:
“While many are ringing their hands, I recall the 1970’s when we were suffering from an oil shock causing long lines at the gas station, rationing and 55 mph speed limits on federal highways, a recession, very little venture capital, and what President Carter (wearing a sweater while addressing the nation on TV because he had turned down the heat in the White House) called a “malaise”. It was during those times that two kids without any real college education, Bill Gates, and Steve Jobs, started companies that did pretty well. Opportunities abound in bad times as well as good times. In fact, the opportunities are even greater when the conventional wisdom is that everything is going into the toilet. … we can look forward to a new year filled with opportunities as well as stimulating challenges.”
So what are these changes and how will they impact employee relocation?
- The Moving Expense Deduction: The moving expense tax deduction will be suspended until the year 2025. This means that companies that gross up the relocation expense will need to plan on an increase for the household goods move, 30 days of storage and final move trip. Since this is no longer an excludable tax deduction, the moving expense will now show as income to the employee. (*Exceptions will be for a military relocation). There are other areas of impact for relocation expenses as well which include supplemental rate changes, mortgage insurance, home sale capital gains reduction, and others. The bill does not seem to effect the tax on relocation home sale transaction expense completed by an RMC. Please consult with your tax firm for making any changes to your current program.
- Electronic Logging Device (ELD) Mandate: The Federal Carrier Motor Safety Act (FMSCA) has now mandated the use of ELD’s for all truck drivers including household goods van operators. This device will sync with the van operators working / driving hours. What does this mean for corporate relocation? It could mean longer transit times up to 2 days due to the hours of service rules, increase temp housing, and an increase in transportation costs. The key to success will be communicating expectations during the relocation. Companies and their suppliers must be proactive, more now than ever when communicating with employee/family moving for a successful relocation.
Call to Action: Reach out to your tax consultant for the latest tax law changes and update your policy as soon as possible. Q1 would be a great time to review any changes with your suppliers and partners. If you don’t a partner, invest in one for 2018! You will appreciate the single point resource and so will your employees relocating.
“The first step to leadership is no action, it’s understanding.” (John W Gardner)
This has been A Relocation Minute on “Relocation Changes in 2018” with Bruce Waller, For more information, call 972-389-5673, or email firstname.lastname@example.org or check out our my social media Facebook and Twitter page.
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