Moving your home from one place to another can be a drag, especially if it’s quite a distance. Not too many of us are ecstatic about having to pack everything up, or lift and carry heavy boxes and even heavier pieces of furniture. And then, you have to unpack and settle all your things once you reach your destination. It doesn’t all happen in day, or probably not even a couple of weeks for a few of us. But there is a silver lining… depending on why you moved.
If you moved your home in order to start a new job, or to continue your current job at a new location, you can deduct certain moving expenses. However, there are a few rules from the IRS that applies to deducting your moving costs.
1. Start of Work
Your move has to be close to the time you start working at your job. The IRS advises that moving expenses can be considered within a full year of the date you start working at your new location. In other words, if it’s been two years since you’ve moved and started working, then it may be too late to report any deductions. You can find out from a tax professional about any additional requirements to this rule.
2. The Distance Test
The location of your new job must be more than 50 miles than the distance from your old home to your previous job location. To put it simply, if your old job was five miles away from your old home, then your new job has to be at least 55 miles away from your old home.
3. The Time Test
Within the first year after your move, you have to be working full-time at your new job for at least 39 weeks. This also applies to those of you who are self-employed, along with working a total of 78 weeks within the first two years of your move. If you have a tax return due before you meet this particular requirement, you can still deduct your costs if you expect to pass this test.
If you meet all three requirements, you can deduct your moving expenses. But it doesn’t end there. Here are a couple more expenses you can deduct from your taxes.
Traveling – While moving, you can deduct transportation and lodging costs. These costs can be incurred by you or another household member; however, you can’t include eating expenses with your deduction.
Household Items / Utilities
– The cost of packing, crating, and shipping your things can also be deducted. This can include any costs of storing and insuring your property while moving. Any costs to connect or disconnect your utilities can also be deducted.
With so many things that can be deducted, there are also costs that unfortunately cannot be deducted.
- Any costs of selling your old home
- Any costs of terminating or entering a lease
- Any of the purchasing costs of your new home
You should also be aware that if your employer reimburses any of your moving expenses after you’ve already deducted, you’ll need to report the payment as income. The amount has to be reported on your tax return for the year you receive the payment.
For more information about tax deductions, check out these blogs:
If you’re an employer, you can e-file your 1099s and W-2s with ExpressTaxFilings. We work closely with the IRS to provide you an e-filing service that is secure, safe, and accurate. And we also offer support with our hard-working technical teams that’s the most experienced in the industry.
You can receive more information or assistance about e-filing our available tax return forms by contacting our live professionals at our Rock Hill, South Carolina, headquarters. We are available by phone (704-839-2270, Monday through Friday from 9 a.m. to 6 p.m., Eastern Standard Time), email (firstname.lastname@example.org), or live chat (www.expresstaxfilings.com).