If you need to make a work related move you may be able to deduct the costs of moving your home location. When you move due to starting a new job or the same job but in a different location, if three specific requirements are met you will be able to deduct your moving expenses. These requirements are:
- You meet the distance test – Your new primary job location must be at least 50 miles farther than your previous home was to your previous job location. For example; if you lived 5 miles from your workplace your new home must be a minimum of 55 miles from your previous home.
- You meet the time test – After you make your move you must work at your new job for at least 39 weeks during the first year. Self-employed individuals must not only meet this test but must also work full time for a total of at least 78 weeks during the first 24 months after arriving at their new location. If you have to file your tax return before this requirement has been met, you may still deduct your moving expenses as long as you expect to meet the time test.
- Your move is close to the time you start your new job – Usually, you may deduct your moving expenses within one year of the date you first start to work at your new job location.
As always when you are deducting items on your tax return, you must keep accurate records for verification should the Internal Revenue Service (IRS) request proof of your deduction figures. Therefore, before you consider any new home location which would be job related consider the previous described IRS requirements and make sure you save all documentation relating to your move. Typically moving is an expensive endeavor, therefore if you might be able to recapture some of your moving expenses by deducting the costs you incurred with the move it would be well worth the extra effort needed to save all your verifying documentation.
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