Little Known Ways to Deduct Moving Expenses

Commuting situation changed recently? Your new expenses may be tax deductible. From the desk of the IRS:

"How far you moved and the amount of time you spend on the job will have a major impact on whether you qualify for the tax break. Moves that are only short hops and jobs that are short-term or part-time generally do not qualify. However, if you can satisfy the distance and time tests then job-related moving expenses that you incur may be tax deductible."

So what move qualifies?

-Your new workplace is at least 50 miles further from your former home than your previous workplace was from that home.

Translated into normal English, this means...

a. If you do not move homes but your job moves to an office buildings at least 50 more miles away, you can deduct the expense.

b. If you move and your new job is 5o additional miles away from your old home, you can deduct the expense. (i.e. If your old job was 5 miles from your former home, your new job must be at least 55 miles from that home.)

-You are a W-2 employee and you worked full-time for at least 39 weeks during the 12 months immediately after your move.

Translated into normal English, this means...

If in the 12 months immediately following your move you worked full-time for at least 39 weeks, then you can deduct the expense.

-You are self-employed and you worked full-time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after your move.

Translated into normal English, this means...

During the 12 months following your move you worked full-time for at least 39 weeks AND a total of 78 weeks the 24 months following your move.

**You can deduct your moving expenses on your tax return even though you have not met the time test by the date your return is due if you expect to meet the 39-week or the 78-week test as required.**

-Members of the armed forces do not have to meet these tests if the move was due to a permanent change of station.


What Can I Deduct?

Reasonable moving expenses.

-The cost of moving your household goods and personal effects to your new home.

-The expenses of traveling to your new home, including lodging costs.

What Can I NOT Deduct?

1. Meals eaten while in transit between your old and new homes.

2. No part of the purchase price of your new home.

3. Moving expense for expenses covered by reimbursements excluded from income. (i.e Moving expenses that are already paid for by someone else, like your new company.)

For additional information on moving expenses, including an extensive list of deductible and non-deductible expenses, download Publication 521.