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Moving Expenses – What You Can Deduct When You Relocate for Your Job

Posted on November 28, 2012 by

job relocation tax deductionsIf you had to move a significant distance for a new job at any point in the past year, you may be able to claim the moving expenses deduction on your taxes. If your employer did not reimburse your relocation expenses, and you meet the following requirements, don’t miss saving the expenses from your move.

Requirements for Moving Expense Deductions

1. Your moving expenses have to be close to the time you start work. Generally, you can consider moving expenses that you incurred within one year of the date you first report to work at a new job location.

2. Your new main job location is at least 50 miles farther from your former home than your previous main job location was from your former home.

3. You worked at least 39 of the first 52 weeks, full-time, in the area you relocated.

If you’re self-employed, you must also work full time for a total of at least 78 weeks during the first 24 months upon arriving in the general area of your new job location.

If your income tax return is due before you have satisfied this requirement, you can still deduct your allowable moving expenses if you expect to meet the time test. There are some special rules and exceptions to these general rules, so see IRS Publication 521 for more information.

What’s deductible?

You can deduct only those expenses that are reasonable for the circumstances of your move. These include:

Travel – You can include the travel costs, excluding meals, for each member of your family. If you drive, you can use either your actual expense, such as gas and oil, or the standard mileage rate. For 2012, the standard mileage rate for using your vehicle to move to a new home is 23 cents per mile.

If you take a plane, train, bus or other method of transportation, use the cost of your ticket. If different members of your household use different means of transportation, you can include all of the costs. For example, if you drive the car and incur actual expenses of $250 and your wife flies with your two children at a cost of $700, your total deductible travel expenses equal $950.

Household goods and personal effects – You can include the reasonable costs of moving your belongings and those of your household from your old home to your new home. This includes the cost of packing, crating and transporting your household goods and personal effects and those of the members of your household from your former home to your new home. If you pay to have your car or pets shipped to your new home, those costs can also be included.

Utilities – You can include the costs you pay to connect or disconnect utilities because you are moving your belongings.

Lodging – The IRS permits you to include the costs of lodging for one day in the area of your old home after you can no longer live in your old home, as well as lodging as you travel. However, you cannot include lodging costs if you extend your trip to sightsee or visit relatives not directly on the way.

Storage – You can include the cost of storing your furniture for up to 30 consecutive days after arriving at your new home.

More details are available in IRS Publication 521 and Form 3903. IRS publications and forms are available on IRS.gov or by calling 800-829-3676.

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