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Last year I made $23,000, and I paid $8149 in taxes to Federal/State/Medicare/SS/Disability. However, I also got a Relocation bonus of $9,000, $4,770 of it was deducted. However, this deduction did NOT go under the "Taxes" section of my W-2. Instead, it went under the "After-Tax Deductions" section.

My question is: Where did this $4,770 go?? Did it go to Federal? State? Straight back to my company? And what do I do with this on my 1040? Do I add it on top of taxes already paid?

Thanks in advance!

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    Companies that issue such bonuses often have a standard set of guidance sheets, or have tax accountants on call who specialize n relocation. I'd start asking there, personally. – keshlam Jan 15 '17 at 18:59
  • what exactly did the $4,770 represent. was it the true cost of the moving costs? – mhoran_psprep Jan 15 '17 at 19:19
  • The $4,770 is the money the company "took out" due to taxes. – zack Jan 17 '17 at 21:30
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Most likely that $4770 represents the expenses that were paid directly by the company and that $4330 were paid to you (for a total bonus of $9k). The IRS taxes you on the value of moving expenses paid by the company, treating it as if it were additional salary.

Therefore the moving expenses paid by the company are added into gross pay. But since you don't actually get that money, they are then removed as an after tax expense (so that the math to calculate net pay works out).

Edit: Based in the revision to the question regarding what you do with the after tax deduction: You don't do anything. The value of the $4770 will be in your gross wages on your W2. You don't enter after tax deductions any where as the IRS treats that money as if you were paid it even though you never got the money.

  • Interesting! I had no idea they did it that way. Thanks for the help! – zack Jan 17 '17 at 21:29

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