Moving Expenses Related to a New Job May Be Tax-Deductible

Did you recently move to another city for a new job or because your old job is now at a new location?  A tax break may be coming your way.

How far you moved and the amount of time you spend on the job will have a major impact on whether you qualify for the tax break.  Moves that are only short hops and jobs that are short-term or part-time generally do not qualify.  However, if you can satisfy the distance and time tests, then job-related moving expenses that you incur may be tax-deductible.

You will meet the distance test if your new workplace is at least 50 miles further from your former home than your previous workplace was from that home.  For example, if your old job was 5 miles from your former home, your new job must be at least 55 miles from that home.

The time test requires that you work full-time for at least 39 weeks during the 12 months immediately after your move.  If you are self-employed, the time test requires you to work full-time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after your move.  Even though you have not met the time test by the date that your return is due, you can deduct your moving expenses on your tax return if you expect to meet the 39-week or the 78-week test as required.

If you could have reasonably expected to fulfill the time requirements but was prevented by death, disability, job lay-off, or a transfer by your employer, you may be able to deduct the moving expenses even if you did not meet the time test requirement.

Members of the armed forces do not have to meet these tests if the move was due to a permanent change of station.

Reasonable moving expenses are deductible and include the costs of moving your household goods and personal effects to your new home.  You can also deduct the expenses of traveling to your new home, including lodging costs.

Meals eaten while in transit between your old and new homes are not deductible as moving expenses.  No part of the purchase price of your new home may be deducted as a moving expense.  You cannot claim a moving expense deduction for expenses covered by reimbursements excluded from income.

If you are contemplating a move in the near future, we urge you to call our office for additional details related to your planned move.  Please also remember that wherever you move, with today’s modern means of communications, we can continue to assist you with your tax and financial needs.