Tax Deductible Moving Expenses

Paying taxes are an inevitability in life, however making a physical relocation of your residence has tax implications. If you move, you may be able to deduct any expenses you incurred during the move.

You may be eligible for the write off if you work as an employee or are self-employed in the new location, regardless of whether you have the work lined up before you move. The Tax Act reports your expenses and deduction on Form 3903, Moving Expenses.

10 Tips for Deducting Moving Expenses

Here are 10 valuable tips from the IRS on what you can and cannot deduct when it comes to moving expenses:

  1. For a move to be eligible for tax deductions, your move must be able to meet the time and distance tests:
    • Distance: The distance from your last residence to your new workplace must be a minimum of fifty miles further than the distance from your last home to your old workplace.
    • Time: You must work as a full-time employee in the new area for a minimum of thirty-nine weeks during the initial twelve months after you arrive at your new place. The can be for more than a single employer.
  2. If you are self-employed in the new area, in addition to working a minimum of thirty-nine weeks during the initial twelve months, you must also work a total minimum of seventy-eight weeks during the initial twenty-four months after arrival. The seventy-eight weeks can include time working as an employee and as a self-employed person combined.
  3. Only one person out of a married couple needs to meet the distance and time tests.
  4. If you are an Armed Forces member, you do not have to meet these two tests if your move is for a change of permanent stations, including a move within one year after you retire or leave active duty. Other exceptions to the distance and time tests include if you lose your job or other situations.
  5. Examples of moving expenses that you can deduct for yourself, your family and your belongings include:
    • Professional moving company services
    • Do-it-yourself moving trucks or pods
    • Oil, gas and other vehicle consumables in place of the standard moving mileage rate, if you travel by car
    • Packing supplies (blankets, tape, boxes)
    • Mover insurance
    • Help with your move, for example, if you pay someone to help you load and unload the truck
    • Travel expenses (but not meals) for one trip each for you and members of your household
    • Storage for up to 30 days after goods are moved and before they are delivered to your new home
  6. The following are not qualifying deductible expenses:
    • Meals during travel
    • Expenses of buying or renting your new home at the new location
    • Expenses of breaking your lease or selling your home at your old location
    • Any house-hunting costs for traveling to find a new home before the move
  7. Other stipulations regarding the tax deduction of moving expenses includes:
    • Only one moving trip cost is eligible for deduction
    • Only one day of lodging at the old home is eligible for deduction. This would be if you had to stay elsewhere because your furniture had been moved.
    • You are not allowed to write off expenses for which your employer reimbursed you unless your employer included those reimbursements in your income.
  8. Look on your Form W-2, box 12. If there is an amount with a code P, that amount is included in your taxable income. You should take a moving expense deduction to avoid paying tax on your reimbursements. You should also take a moving deduction if your employer included your reimbursement with wages in box 1 of Form W-2.
    • If there is no code P amount in box 12, and your employer did not include the reimbursements with your wages in box 1, do not take a deduction for your reimbursed moving expenses.
  9. Moving expense deduction do not have to be itemized:
    • Moving expenses are an adjustment to income, not an itemized deduction.
    • In addition, because they reduce your adjusted gross income, moving expenses may also help you qualify for other tax benefits that are limited at higher income levels.
  10. Remember to change your physical or mailing address with the IRS. The right form is called “Change of Address #8822”. This is especially important if you’re expecting a refund or correspondence from the IRS.
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