Relocation & HR Trends

A Guide to Educating Your Transferees About Relocation Taxes

Posted by Lauren Decker on Sep 3, 2015 11:20:26 AM

The hardest thing in the world to understand is income taxes.” — Albert Einstein

If Einstein said it, it has to be true, right? 

Whether you agree or disagree with this statement, it’s safe to say that filing taxes can be pretty darn complicated. You have to take a number of factors into consideration, like salary, bonuses, marital status, location, number of dependents, and more.

If you’ve recently relocated, that can add another layer of complexity to the mix.

Depending on your company’s relocation benefits, the subsequent tax implications for your relocating employees can range from a few deductions to major changes in how they file. And although the actual moving part of their relocation may be over, taxes can be an ugly blemish on an otherwise successful move if handled poorly.

Filing taxes correctly is ultimately the responsibility of your transferring employee. You can’t file for them, and you aren’t necessarily responsible for connecting them to a tax expert. However, making sure your employees are aware that their relocation could have tax implications and providing education can help them take the first step to filing correctly.

 Are you educating your transferees?

If not, you may want to think about either pointing them to some tax resources, or providing some base-level education yourself. At the very least, we recommend you make them aware that their relocation could impact the way they file taxes this year.

If you are looking to provide educational resources, the Worldwide ERC provides an overview of relocation taxes on their website. Depending on the relocation benefits your employees are offered, the tax implications can vary drastically. It may not make sense to provide education to cover every tax scenario possible, but sharing the basics can be a good starting point—especially for your lump sum population.  

There’s a good chance that many of your transferees receiving lump sum have never moved on their own before and therefore have never had to file taxes that include relocation expenses. Providing some foundational information before their move can help ensure that they make smart decisions throughout their move and prepare them for their end of the year tax filing.

Let’s take a look at some basic relocation taxes and how they can impact your relocating employee's experience.

Relocating Ron has been transferred from his San Francisco office to the San Jose office for a new position. His company has offered him a reimbursement of up to $2,000 for his move.

Ron wants to be smart about spending the $2,000, so looks for ways to stretch the funds. He knows that shipping household goods is tax deductible so he books a mover, submits his expenses for reimbursement, and makes the move. However, at tax season when he tries to deduct the household goods shipment, he finds that he’s not eligible. He didn’t meet the distance test requirements which says that his new office needed to be 50 miles further from his old house than his previous place of work.

Although the taxes owed aren’t substantial, he’s frustrated that he owes more taxes than he planned for and didn’t catch the eligibility requirement.

This is just one example of how taxes can impact the relocation experience long after the physical move. In this case, it was an oversight that won’t cost Relocating Ron a lot of money, but this won’t always be the case. 

If Relocating Ron had known about the distance test, he may not have made any decisions differently, but he would have been prepared and not caught off guard when tax season rolled around. Luckily Ron had the funds to cover the discrepancy, but not everyone will.

You can provide basic tax education about things like the time and distance test in a number of ways. You may choose to simply let employees know that there could be tax implications and point them to a resource like ERC’s, or you can hand them a brief overview of relocation taxes when they receive their policy information.

If you’re providing relocation management software as a benefit, look for solutions that also provide some kind of tax education. This allows transferee to reference education information throughout their move and reduces risk of losing the information since it’s a digital solution. Some solutions, like Relocation Management Software, provide general tax information within the application. Additionally, when expenses get uploaded, platforms like UrbanBound tag expenses that might have tax implications and link employees back to the general tax education for further information.

No matter how you choose to educate employees, we recommend taking some measure to ensure they understand that their relocation could impact their upcoming tax season. This will not only help prepare them for a successful move, but also demonstrates that your company cares about their employees and their relocation experience.  

This blog is intended for general information. Regarding your specific situation, we suggest that you consult with your own tax or legal advisor as appropriate.

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Topics: Relocation

[New eBook] 11 Companies Give Their #1 Tip to Reduce Employee Turnover

Posted by Aria Solar on Sep 2, 2015 2:24:39 PM

employee turnover

Employee turnover is something that every company deals with, it's a natural part of growing. Employees grow out of their positions and into new paths—paths that might no longer be at your company. 

Disclaimer: This will happen no matter where you work. 

No matter how appealing your company culture is, how attractive your benefits package is, or how much you care about your employees, people are going to leave. It's simply a part of business, and every company goes through their own bouts of turnover. 

However, it's how a company deals with it that can make all the difference.

It's about learning from your churned employees and then adjusting your strategies properly. It's about taking measures to ensure that the reason why one employee left, will not be the same reason another leaves. It's about being communicative and honest with the employees still there, and keeping the involved teams/people in the loop the entire time.

Employees will stay with employers they trust, respect, and have a good relationship with. The more open you keep that line of communication, the more likely your employees will come to you with problems and concerns, instead of walking out the door. 

While no company can have a 100% retention rate, we can do our best to keep our turnover levels as low as possible and learn from the ones who do leave. 

UrbanBound spoke with 11 different companies to get their #1 tip on reducing employee turnover, and everyone had very different ideas and strategies that worked for them. Not every strategy will work for you or fit the culture you're trying to create, but by trying a variety of things, you might just find success with one! 

Check out our eBook below to find out what 11 companies had to say about their #1 way to reduce turnover:

employee turnover

 

 

HR Tech and Relocation in the News: What You Need to Know

Posted by Aria Solar on Sep 1, 2015 2:36:00 PM

relocation and HR Tech

We're back this week with another installation of HR tech and relocation!

As we wrap up our busy moving season, there is a lot of news to stay on top of. We understand how difficult (and time consuming) it can be to keep up with all the trends amidst the chaos—so we've done some of the leg work for you.

Here's a roundup of weekly blogs, publications, and articles in the HR and relocation world that we found to be the most noteworthy.

Check out what's new! 

Cloud-based technology is making a statement in onboarding

Cloud technologies continue to sweep across many industries, revolutionizing the way we handle a variety of processes. Most recently, we have seen a big impact made on onboarding. 

HR.BLR.com explains in article "How is cloud-based technology changing the onboarding process?" that onboarding has (and will continue to be) heavily affected by the cloud. Karl Mehta, CEO of EdCast, explains that,

"Many companies using the cloud still conduct in-person onboarding events, but the technology gives them the opportunity to personalize onboarding. For example, if two new hires join a company on the same day but one is a faster learner or more experienced, that individual might feel frustrated learning with a group in a classroom or rehashing information he or she has already mastered."

Mehta goes on to explain that, "With cloud-based technology, new hires can proceed with onboarding at their own pace and, once they demonstrate their knowledge in a certain area, the technology allows them to skip over information that less experienced employees would have to complete." 

Moving the onboarding process to an online platform allows you to engage your employees in a process that is useful and relevant to them. It encourage a social experience with thoughtful participation, while still ensuring that the right information is getting through to each and every new hire. There is nothing worse than an inconsistent onboarding process, and technology helps companies to achieve consistency. 

HR tech and relocation news

The Amazon debacle and our workforce

Amazon was recently in the news for their workplace policies, and now that the tide has passed, we're starting to learn some things about the workforce. Whether you agree with the claims or not, some valuable insights have come from the debacle. 

Fortune claims in the article "What Amazon’s workplace controversy says about the future of work" that we'll soon challenges in 3 areas of the workplace: attracting talent, consumer loyalty, and high-trust companies. 

They explain that "In recent years, people around the globe have been seeking greater well-being—including in their work lives. The millennial generation in particular is likely to pass on 'work-first' company cultures. A recent survey of nearly 66,000 U.S. undergraduates by consulting firm Universum found that young people rank work-life balance as their top career goal."

As it relates to consumer loyalty, the increasing demand for transparency internally will begin to take shape externally as well. Consumers care about how companies treat their employees, and they aren't quiet about it. In fact, "Marketing firm Young & Rubicam found that between 2005 and 2009, U.S. consumers expressed a nearly four-fold increase in their preference for companies, brands, and products that show kindness in both their operations and their encounters with customers." 

Lastly, people are loyal to companies that exude trust. In fact, "From 1997 to 2014, publicly traded companies on Fortune’s 100 Best Companies to Work For list outperformed the S&P 500 by a factor of nearly two to one." Employees that work for companies they care about and respect naturally stay longer, work harder, and are happier. 

PwC releases report: Top 7 cities in Europe to find work

The forecast for 2016 is finally in. MoveHub recently featured the top 7 cities in Europe to find work (original report by PwC) and gave a brief description of what each city has to offer. Here's the breakdown:

  1. Dublin
  2. Barcelona
  3. Berlin
  4. Bucharest
  5. Paris
  6. Vienna
  7. Amsterdam

It is important to keep in mind where people want to move. The cities that are garnering the most attention will definitely be easy-sells to your candidates and transferees, but remember that cost-of-living often is higher in these top-destination cities. Do your research and remember to keep on top of trends in your top cities. 

Global Mobility and Immigration Updates from the ASE 2015 Global HR Conference

Dave Foess of Relocation America International attended the American Society of Employers Global HR Conference and touched on a variety of important topics.  The Relocation Review explains what was discussed throughout the session and some of the key takeaways, including:

  • Current global immigration and mobility trends
    • Short-term assignments
    • Financial exposure to companies due to large volume of employees on assignments
    • Focus on security
    • The promotion of short-term assignments to avoid overhead/tax costs

The conference was described as, "Overall a great opportunity to network with top HR professionals and gain knowledge about those issues which are impacting both global immigration and global mobility."

Stay tuned for more news coming up next week!

employee welcome kit

Topics: Technology, Relocation, HR

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