How Can I Deduct Moving Expenses?
How Can I Deduct Moving Expenses?
Some moving expenses are tax deductible. There are certain requirements you must meet before you can deduct any moving expenses. If you move because of your job, you may be able to deduct the cost of the move on your tax return. You may be able to deduct your costs if you move to start a new job or to work at the same job in a new location. The IRS offers the following tax tips about moving expenses and your tax return.
What are the requirements to be able to deduct moving expenses? What moving expenses are tax deductible?
In order to deduct moving expenses, your move must meet three requirements:
- The move must closely relate to the start of work. Generally, you can consider moving expenses within one year of the date you start work at a new job location. Additional rules apply to this requirement.
- Your move must meet the distance test. Your new main job location must be at least 50 miles farther from your old home than your previous job location. For example, if your old job was three miles from your old home, your new job must be at least 53 miles from your old home.
- You must meet the time test. After the move, you must work full-time at your new job for at least 39 weeks the first year.
Moving Expense Deduction Requirements for Self Employed Individuals
In addition to the requirements outlined above, if you're self-employed, you must meet this test and work full-time for a total of at least 78 weeks during the first two years at the new job site.
My income tax return is due before I met all the requirements to be able to deduct moving expenses, what do I do?
If your income tax return is due before you've met this test, you can still deduct moving expenses if you expect to meet it.
How long do I have to deduct moving expenses?
Generally, you can consider moving expenses within one year of the date you start work at a new job location. See IRS publication 521 for more on the rules.
How far do I have to move to be eligible to deduct moving expenses?
Your new main job location must be at least 50 miles further from your old home than your previous job location.
What if I moved and then lost my job? Can I still claim the moving expense deductions?
After the move, you must work full-time at your new job for at least 39 weeks the first year. Its different for people who are self employed, see publication 521.
Can I deduct hotel costs and gas as part of the moving cost?
Transportation and lodging expenses for yourself and household members while moving from your old home to your new home are tax deductible.
Can I deduct meal costs during my move?
You cannot deduct your travel meal costs. Travel meal costs are not tax deductible.
Can I deduct packing costs, shipping costs, and storage fees?
You can deduct the cost of packing, crating and shipping your things. You may be able to include the cost of storing and insuring these items while in transit.
Can I deduct the cost of connecting and disconnecting utilities?
People often forgot that the cost of connecting and disconnecting utilities are tax deductible when you qualify for moving expense deductions. You can deduct the cost of connecting or disconnecting utilities.
I have to sell my home to move, relocate, is the cost of selling my home tax deductible?
You cannot deduct as moving expenses any part of the purchase price of your new home or the cost of selling a home. See Publication 521 for a complete list.
In order to relocate, I have to break my lease, is the cost of breaking a lease tax deductible?
You cannot deduct the cost of entering into or breaking a lease. See Publication 521 for a complete list.
My employer pays for some of my moving expenses, can I still deduct moving expenses?
If your employer later pays you for the cost of a move that you deducted on your tax return, you may need to include the payment as income. You report any taxable amount on your tax return in the year you get the payment. You can deduct other expenses that weren't paid for.
For more information about deducting moving costs, see Publication 521, Moving Expenses.