MOVING EXPENSES
Taxpayers may deduct qualified moving expenses that are not reimbursed by an
employer, or amounts in excess of any employer reimbursement. The deduction is
an “above the line” deduction, so the expenses may be claimed as an offset
against income even if a taxpayer does not itemize deductions. But, there are
specific distance and time requirements below must be met to qualify for the
deduction.
THE TWO SPECIFIC REQUIREMENTS THAT MUST BE MET
1. DISTANCE TEST:
The distance between a taxpayer’s new main job location and former home must be
at least 50 miles farther than the distance between the old job location and
former house. First time employees or persons return to the work force meet the
test if the new work place is at least 50 miles from the former home. The
distance test considers only the former home, and does not take into account the
location of the new home.
2. TIME TEST: A
taxpayer MUST work as a full-time employee for at least 39 weeks during the 12
month period following arrival. For married taxpayers, only one spouse needs to
satisfy the full-time work test. Self-employer taxpayers must work at least 39
during the first 12 months, AND a total of at least 78 weeks during the first 24
months after arrival at the new job location. A person can count any full-time
work as an employee or as a self-employed person. The taxpayer needs to begin
employment or self-employment with one year of the move to qualify.
TAX DEDUCTIBLE COSTS AND EXPENSES
1. COSTS OF MOVING
HOUSEHOLD GOODS AND PERSONAL EFFECTS: Deductible costs include the costs of
moving household goods and personal effects from the old residence to the new
place of residence, including amounts paid to a commercial moving company and/or
the cost of a self-move such as a van rental, in-transit storage expenses, and
packing materials. The costs of storing and insuring household and personal
goods only for a period of 30 consecutive days.
2. TRAVEL
EXPENSES: Deductible travel costs to the new residence include the following:
A. Travel expenses for one trip for the taxpayer
and for each member of the household, which includes lodging in transit, but NOT
meals. This includes lodging during the move and could include airfare,
parking fees and tolls.
B. If a personal
vehicle is used to travel to the new home, you can deduct either the actual
costs paid for gas and oil during the move or mileage at $.12 per mile
traveled.
NONDEDUCTIBLE EXPENSES
The following expenses CANNOT be deducted as moving expenses:
-
Pre-move househunting expenses, although
job-hunting expenses may be deductible.
-
Temporary living expenses, except for a hotel
stay for one day prior to a move and the day of arrival.
-
Any meal expenses.
-
Expenses of buying or selling a home, mortgage
penalties, lease cancellation costs, lease deposits.
-
Expenses of side trips, such as sightseeing
trips, while moving.