Moving Expenses Deduction


If you made a work-related move this summer, you may be able to deduct your moving expenses . Not only can people who moved to start a new job take this deduction, but those who moved to work the same job at a different location may take the deduction as well.

In order to deduct moving expenses you must meet three requirements:

1.        Your Move Closely Relates to The Start of Your New Job : Typically, you can consider moving expenses within 1 year of the date you first report to work at a new job location.

2.        You Meet The Distance Test : Your new main job location must be at least 50 miles further from your former home than your previous main job location. If you lived 5 miles from your main job location prior to your move, your new job location must be 55 miles from your home.

3.        You Meet The Time Test : After you move, you must work full time at your new job location for at least 39 weeks during the first year. Self-employed individuals must meet this test and also work full time for at least 78 weeks during the first 24 months of relocating. If your taxes are due prior to meeting these requirements, you can still deduct your allowable moving expenses if you expect to meet the time test.

Once you decide that you are eligible to deduct your moving expenses here are a few tips to help you decide what to deduct.

·          Travel : You can deduct transportation and lodging expenses for yourself and household members while moving from your former home to your new home.

·          Household Goods : You can deduct the cost of packing, crating, and shipping your home goods and personal property. In some case you may be able to deduct the cost of storing and insuring these items during transit.

·          Utilities : You can deduct the costs of connecting or disconnecting utilities.

Please note, that you may not deduct the purchase price of your new home, the costs of buying or selling a home, or the cost of entering or breaking a lease. Moreover, if your employer reimburses you for the costs of a move for which you are taking a deduction; you may have to include the reimbursement as income on your tax return.

To figure the exact amount of your deduction for moving expenses, use form 3903 Moving Expenses .


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