Thursday, August 22, 2013

What Moving Expenses Can I Deduct?

Moving is always a difficult and tedious task, but if your move is related to a new job or an existing job at a new location, you may be able to deduct some of the related expenses—making the task a bit easier to take.  There are three criteria you must meet in order to deduct your expenses:
  1. Your move must occur generally within one year of the date you first begin work at the new location.  
  2. Your job location must be at least 50 miles farther from your old home than your old job location was.  That’s a little confusing, but if you used to live 10 miles from your old place of employment, your new place of employment but be at least 60 miles from your old home in order to qualify.
  3. If you are working for an employer, you must work full time out of the new location for a minimum of 39 weeks during the first year.  If you are self-employed, you must work full time for at least 78 weeks out of the first 24 months. 
  4. If you are filing your tax return prior to the time requirements being met, you can deduct the expenses as long as you expect to meet the requirements.  Just realize that if you fail to meet the requirements, you will need to make adjustments. 
Some of the expenses you may be able to deduct, if you meet the criteria listed above, include:
  • Travel – Transportation and lodging expenses for you and your family while moving between homes is deductible.  Meals are not deductible.
  • Household Goods – The cost of packing and transporting household goods and personal property is deductible.  Storage of items and insuring them may also be deductible.
  • Utilities – The cost of turning off and connecting utilities is deductible.
The purchase price of your new home is not deductible nor is any part of the closing costs.  In addition, the cost of selling your old home is not deductible.  Also, if your employer provides reimbursement of any of your expenses you will need to either omit those from your deductions or if you already deducted them, include the reimbursement as income on your return.

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