2022 Moving Expenses Tax Deduction: A Guide for PA S Corporations and Partnerships

As a Pennsylvania S corporation or partnership, understanding the tax implications of moving expenses can be crucial in minimizing your tax liability. In this article, we will explore the key aspects of claiming moving expenses as a deduction on your PA Schedule UE.

Firstly, it is essential to note that any changes made to IRC § 179 after January 1, 1997, are not applicable to Pennsylvania. This means that you should only consider federal treatment as of January 1 for purposes of determining the IRC Section 179 deduction allowed on your federal return.

PA S Corporations and Partnerships: Are You Entitled to the Same Deduction?

Pennsylvania follows federal treatment as of January 1, which means that PA S corporations are entitled to the same IRC Section 179 deduction allowed on their federal returns. This allows you to claim a one-time elected expense limited to the amount of active income reported to Pennsylvania or $25,000, whichever is less.

Use Tax: Are You Due?

If your utilities are billed to a commercial use (taxable) customer, use tax is not due on the expense since sales tax has already been applied. However, if you did not incur an allowable business expense during the year, you may be subject to use tax on the mixed use of the property.

Prepaid Funeral Expenses: An Asset or Deduction?

Prepaid funeral expenses can be both an asset and a deduction. The value of the prepaid funeral should be listed on REV-1508 Schedule E, while the actual costs of the funeral services should be listed on the same schedule.

Schedule UE: What Expenses Are Not Allowable?

You did not incur an allowable business expense during the year if you received a fixed mileage allowance or a per diem expense allowance and neither you nor your employer included the allowance. Additionally, expenses that are not required to perform your job and not paid for by your employer are also not deductible.

Safe Harbor Deduction: Can You Claim It?

If you claim the safe harbor deduction for federal income tax purposes, you may not want to calculate the expense using actual expenses and a percentage of your home for PA personal income tax purposes. However, this can result in reduced deductions or even disallowance of certain expenses.

Union Dues, Agency Fees, and Initiation Fees: Are They Deductible?

Union dues, agency fees, and initiation fees are acceptable deductions on the PA Schedule UE. These types of expenses must be required to perform your job and not paid for by your employer.

Acceptable Deductions on the PA Schedule UE

The following is a list of deductions that may be claimed on the PA Schedule UE:

* Moving expenses

* Union dues, agency fees, or initiation fees

* Expenses related to the purchase or sale of a home

Can You Deduct Your Moving Expenses?

Expenses you pay or incur in moving yourself, your immediate family, your household goods, and your personal effects are only allowable as Unreimbursed Employee Business Expenses if the move is more than 35 miles from the old workplace to the new work place. Additionally, you must continue to work for the same employer to claim this moving expense.

In conclusion, claiming moving expenses as a deduction on your PA Schedule UE requires careful consideration of federal and state tax laws. By understanding the key aspects of IRC Section 179, use tax, prepaid funeral expenses, and acceptable deductions, you can minimize your tax liability and maximize your deductions.

2022 moving expenses tax deduction