Deducting Moving Expenses

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In order to qualify for the moving expenses deduction on your taxes, your relocation needs to be tied to the start of a job at a new location. Not only do new job quality, but your current job works as well if you may have been transferred to a new branch or department. Typically, you can deduct moving expenses that occur within one year from the date you started work at the new location. Even if you have not yet secured a job at the time of your relocation, you can still deduct your moving expenses if you work in the area where you moved during the following 12 months. However, you won’t be able to deduct moving expenses if you don’t relocate within one year of the date you begin work unless you can prove that your timely relocation was prevented by circumstances beyond your control. Furthermore, the Internal Revenue Service (IRS) has two more qualifications you must meet before you can legally deduct your moving expenses on your yearly tax forms. First, your move must meet the distance test, which means that you must be at least 50 miles further from your old home than your previous work location. Second, you must work full-time in the general area of your new job location for at least 39 weeks during the 12 months following your move. However, you do not have to work at the same job for those 39 weeks and it does not have to be a continuous 39 weeks. If you are self-employed, you must work in the area for at least 78 weeks during the 24 months after your relocation in order to meet the time test. Again, you are not required to work a continuous 78 weeks. Deductible moving expenses include the costs for packing and transporting your household goods and personal possessions, storing and insuring your belongings for a period of 30 days after moving out of your old home, shipping your vehicles and pets, transferring utilities, and traveling costs to your new home. You can also deduct the cost of transportation and lodgings for you and your family members while traveling from your previous home to your new residence. Non-deductible moving expenses include expenses incurred when buying or selling a home, expenses incurred when acquiring or breaking a lease, loss on the sale of your old home, mortgage penalties, and other similar property-related expenses, and expenses for home improvements. Other non-deductible items include real estate taxes, house hunting expenses, driver’s license, and car registration fees, losses from selling or giving up memberships, storage charges except those incurred in transit, expenses for the delivery or storage of newly-bought furniture (or other household items, and expenses for meals on the way to your new home. However, if relevant, you might be able to deduct some of these amounts as business expenses. Understand, IRS tax forms and tax deduction policies are complicated, so it is always in your best interest to hire a professional to ensure you cover all of the bases.

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