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Each year, millions of people relocate to a new location within the U.S., usually due to a new job. Between 2008 and 2009, over 37.1 million residents packed their belongings and moved into a new home or apartment in a new city, county or state, according to the U.S. Census Bureau.
Even in the best economic climate, getting the most out of every dollar helps. If you’re in the middle of moving to another place, you may be able to get Uncle Sam to foot the bill for some of your moving expenses.
A tax deduction is one of the best ways to lessen your financial liability and get a little cash back in the process. Fortunately, you can offset the costs of moving to your new home by deducting most of your moving expenses. To take advantage of the savings, you’ll need to complete and attach IRS Form 3903 (Moving Expenses) in your next income tax return.
Keep in mind that the IRS can be a bit of a stickler when it comes to deductions. To stay in the clear, you have to meet the following three criteria:
Once you manage to get those requirements out of the way, you’ll be able to make deductions on a variety of moving expenses. For instance, you’ll be able to deduct the out-of-pocket costs of packing and moving your stuff to your new home. You can even deduct the cost of shipping your pets.
Other potential expenses you can deduct from your taxes include:
However, there’s a limit to how much you’ll be able to deduct. Try as you might, but you won’t be able to get a tax credit for any of the following expenses:
Don’t forget to keep all of your receipts related to the move in a safe, secure place. It’s not often that these deductions trigger an audit, but it always helps to be prepared just in case.