Moving costs can add up quickly and you're probably trying to save money wherever you can. As you're looking for ways to do that, check out the possibility of getting a tax deduction for your moving expenses. If your upcoming move is due to a job transfer, starting a new job, or retiring from a job in a foreign country, you likely qualify.
Are You Eligible?
There are 2 tests to determine if you are eligible for a tax deduction for a job related move. They are the time test and the distance test.
- The Time Test - You must work full-time for at least 39 weeks during the 12 months following your move. If you are self-employed you must work 78 weeks for 24 months. If you are married you can count either spouse's weeks, but you cannot combine your weeks to meet this qualification. You may file for this deduction before the 12 or 24 months has passed. However, if you fail to meet the requirement you will have to repay the deducted amount.
- The Distance Test - To pass the distance test your new place of employment must be at least 50 miles further from the home you are moving out of than your previous place of employment. For example, if you lived 15 miles from your previous workplace your new workplace must be at least 65 miles away. If you will be working more than one job, figure the mileage on the job you will spend the most hours at.
What Costs Can Be Deducted?
There are several moving costs that qualify for a tax deduction:
- Costs associated with packing and transporting your personal belongings, household goods, pets, and vehicles. This includes professional movers, like Economy Moving.
- The cost of disconnecting and connecting the utilities at your former and new residences.
- Travel costs for all members of your household. This includes 1 night of lodging during the trip but does not include meals. This is figured on the most direct route and does not include any side trips.
- Expenses accrued for the use of your vehicle during the move. You can file the actual expenses or use the standard mileage cost of $.24 a mile.
- The costs for storing and insuring your possessions for 30 days if you have a waiting period between moving out of your old home and moving in to your new home.
To file for a tax deduction for your moving expenses you will need to complete IRS Form 3903. For a thorough explanation and instructions regarding this tax deduction see the IRS website.