Tips from AIRINC's Global Mobility Tax Experts
The “Tax Cuts and Jobs Act” was signed into law by President Trump on December 22, 2017. This comprehensive tax reform act contains provisions that affect individuals and employers of globally-mobile employees (as well as corporations).
If you are struggling to make sense of these changes and how they can impact you, here are some tips from AIRINC’s tax experts. First begin by asking yourself:
Aware of the net impact of tax costs across your mobility or relocation program?
- Calculate/recalculate cost estimates to ensure that you have accurately projected assignment and tax costs based upon the 2018 tax code
- Update U.S. hypothetical tax withholdings for tax-equalized international assignees
Reimbursing moving expenses (domestic/ international)?
- Consider offering cash lump sums or reimbursable limits
- Think about varying the level of self-service by employee groups or relocation policy
Planning to gross-up moving expenses?
- Review gross-up methodologies (flat rates or income - / family size - specific) and select an approach to best fit your mobility program needs
- Determine whether you will review actual taxes after tax year filing and perform true-ups as needed
Updating policy documents?
- Update to reflect any changes, for example to gross-up moving expenses
- Review policy documents for references to U.S. tax "itemized deductions" and "personal exemptions"
- Review policies to ensure they still make business sense given the current tax structure, and consider modifying policy elements to offset increased program tax costs
Communicating the impact of the 2018 tax changes to your employees?
- Determine which internationally mobile or relocating employees will be affected by tax and/or policy changes, and communicate changes as required
Contact AIRINC today for help calculating cost estimates, lump sum allowances, updating policies, and more.
Are you interested to learn how other organizations are handling these changes?
Look out for our Pulse Survey and participate to get a copy of the results. Contact firstname.lastname@example.org to learn more.