2018 Tax Reform: How the Pending Tax Bill Affects Relocation Benefits

Posted by Abby Baumann on Dec 12, 2017 11:27:18 AM

As of December 2nd, different tax reform bills have passed through the House and the Senate. Lawmakers from both houses plan to work out the differences between the two bills and create one final bill to be passed and signed into law by President Trump before Christmas.2018 Tax Reform

How the Two Tax Bills Address Relocation Benefits

While the two houses come to a compromise, the Joint Committee on Taxation released a list of the similarities and differences between the House and Senate bills. One thing to note as far as relocation goes, is that among the provisions that are the same, is the elimination of the moving deduction, which currently allows an individual who moves for work to deduct moving expenses (given they meet the time and distance test). While moving costs would no longer be a deductible expense for the individual, it is still unclear what this means for employers that provide relocation benefits to their transferring employees, especially ones with direct bill policies for deductible expenses. With Congress’s plans to pass a new bill by the end of the month, it’s likely we’ll have an answer before 2018. UrbanBound will be sure to keep you updated.

relocation for tech companies

In the meantime, significant issues will need to be addressed before the two houses can agree on final bill. Some of those issues are outlined below:

Itemized Deductions: The House Bill seeks to rid many itemized deductions, while the Senate bill, in some cases, seeks to grow them. For example, the House bill repeals the medical expense deduction, while the Senate bill expands it.

Individual Tax Rates: The House Bill cuts the current 7 tax brackets to 4. The Senate Bill keeps the 7 tax brackets, but lowers 6 of the 7 rates. (15% to 12%, 25% to 22%, 28% to 24%, 33% to 32% and 39.5% to 38.5%).

Estate Tax: Currently, there is a 40% tax on inherited assets over $5.49 million. The House Bill immediately doubles the basic exclusion and repeals the tax after 2024. The Senate also doubles the exclusion, but does not repeal the tax.

For a complete list of the similarities and differences you can reference the document released by the Joint Committee on Taxation.

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Topics: Relocation Taxes

How to Create a Robust Relocation Benefit

Posted by Ryne Inman on Dec 12, 2017 8:06:00 AM

Reimbursement policies have been a pillar of employee relocation programs for years. Over time they Expense Management Solutionsevolved, but rather than increase in efficiency, they typically became more time consuming, burdensome, and a hassle to relocating employees, relocation professionals, and payroll departments. Even as technology improved other burdensome processes, reimbursement procedures remained frustratingly manual. UrbanBound’s new expense management solution tackles this very obstacle.

Flexing Expense Management

Current best practices dictate that reimbursement works best as part of a Core/Flex policy, in which “flex” options are paired with a “core” policy that uses direct bill benefits to handle the bulk of an employee’s move. This arrangement allows the best of both worlds for both employers and employees. In a Core/Flex policy, the large portions of an employee’s move are administered via direct bill, where a third party, such as UrbanBound administers the payment for services, avoiding tax penalties, and giving employees a directly defined benefit.

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For instance, an employee’s household goods move, would be paid through UrbanBound, rather than as a dollar amount given directly to the employee. This makes up the “core” policy. The “flex” portions of a policy provide auxiliary support that may vary from employee-to-employee. This includes costs like additional home-finding trips, lease cancellation fees, or storage fees.

Other examples of reimbursed expenses in an ideal Core/Flex policy that in include:

  • Checked baggage fees

  • Meals en route to destination

  • Lease cancellation fees

Utilized in this type of policy, expected fees can be addressed through reimbursement. This approach removes a large degree of variability and in turn, the amount of work needed to approve or deny submitted expenses.

Combining Expense Reimbursement and Direct Bill with the UrbanBound Solution

UrbanBound’s expense management solution streamlines and simplifies this process. Using a direct bill core policy for major expenses, like household goods moves, through UrbanBound allows employees to get service from a network of vetted suppliers. Expense management acts as a fill-in for expenses that aren’t included in that core policy.

Your relocation team can craft a reimbursement policy based on the employee’s needs, and once their relocation has begun, employees can upload receipts directly to UrbanBound. Each upload will be added to an expense report, and is automatically audited against their policy. The administrators at your company are then alerted that an expense has been submitted. Your team can approve or deny each claim. From there, approved expenses can be tracked in UrbanBound’s reporting suite alongside direct bill expenses.

The simplicity and straightforwardness of UrbanBound’s reimbursement tools are a boon to both the employer and employee. Employers save time processing requests and manage less physical paperwork, while constraining spending to predetermined amounts automatically. Employees can more easily manage their receipts, and track the approval status of each transaction each step of the way.

Urbanbound’s expense management and reimbursement tools aim to support relocation programs with best practice solutions for relocation programs. Tackling a time-consuming, burdensome process with easy-to-use technology not only improves existing programs, but opens up relocation benefits to more companies.

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Topics: HR, Relocation Management Software, Product Update

How Technology Can Simplify Relocation

Posted by Lauren Decker on Dec 5, 2017 8:25:00 AM

Technology Simplifies RelocationWhen someone finds out they are moving to a new location, they’re typically filled with a sense of excitement and anticipation. New city, new job, new experiences, and a new chapter in someone’s life.

Yet, when it comes time to start diving into the logistics, those feelings of excitement and anticipation can quickly morph into feelings of anxiety and uncertainty. All the work that goes into moving starts to add up quickly and the relocation transforms from an exciting adventure to an overwhelming, tiring journey.

This can lead to your company’s relocating employees feeling overwhelmed with their relocation and underprepared for their first day—a situation that is detrimental to both the employee and the company.

The Complex Landscape of Employee Relocation

One of the reasons relocations can feel overwhelming is the sheer number of activities that need to get done, combined with the fact that the employee usually has to work with numerous people to accomplish those activities. Just a few tasks that have to happen for every move include: packing up your current home, finding a new home, moving all of your belongings, and travelling to the new location. This doesn’t include preparing for the new job or position.

Let’s take a look at one area of this: moving belongings. This alone requires the employee to obtain a estimates from a few suppliers. If they are exploring three different van lines, that means they need to collect and evaluate three different estimates from three different people.

Now, multiply this by all the other services that might need estimates, like auto shipment, pet shipment, storage, and so on. If the employee receives three estimates for each category, they’re managing a total of 12 different quotes from 12 different people.

This is just one example of how employees are required to juggle multiple communications throughout their move. Add in communication around other relocation activities, like selling a home, finding a home, receiving new hire paperwork and booking travel, and you can see how the moving process might seem overly complex (and overwhelming) to the individual moving.

How Relocation Management Technology Can Help

Fortunately, there are opportunities for you, as the employer, to simplify the relocation experience for your relocating employees. While it’s impossible to take all the stress out of the relocation process, there are opportunities along the way to reduce stress. One of the most impactful ways to simplify the process is to manage relocations in a centralized, online location.

relocation technology

This means bringing the relocation experience online not just for the individuals relocating, but for everyone involved, including suppliers, company administrators, and the third party company helping to manage the relocation. Bringing all of these parties into one online, centralized location streamlines communication, allows stakeholders to complete tasks more efficiently, and ultimately helps the relocating employee feel like they are in-control of their relocation.

Let’s take a look at the scenario above (moving household belongings) and consider what it might look like if managed on a centralized technology platform. Once the supplier receives a request for an estimate, they can upload the estimate into the online platform. Instead of the employee trying to manage the influx of supplier estimates via email, they are able to access all quotes from all suppliers in a single place. The employee can then evaluate all estimates side by side inside their online account. As a result, the employees are armed with information that helps them make an educated decision efficiently.

Similarly, an online platform can help reduce stress in other areas. For instance, the HR or Mobility team administering the relocation can share new hire paperwork via the platform. This not only results in a smoother process for the relocating employee, but it also frees up time from the HR or Mobility team to focus on activities that drive more value.

With an online platform at the center of your relocation program, you enable all parties involved to do their job more efficiently, resulting in a more seamless, simplified experience for the individuals relocating. Bringing all aspects of a move online cuts down the confusion and complexity of the relocation process and empowers your relocating employee to take control of their move.

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Topics: Technology, Relocation

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