When Can You Deduct Moving Expenses?

The end of the year is quickly approaching and for all the super organized planners we thought we would pass along some essential information from the IRS on when and how to deduct your moving expenses on your tax return.

According to the Internal Revenue Service, there are some basic tests you must pass in order to qualify to deduct moving expenses on your next tax return. Two of the tests are for “distance” and “time.”

With the distance test, if you move due to a change in job or business location that is 50 miles farther away from your old home then you can deduct any “reasonable moving expenses.” The IRS website has more details about this test to deduct your moving expenses.

Deduct Moving Expenses on Tax ReturnThe time test means that you must work full time for a certain number of weeks after your arrival in the new area for the first 12 months. The number of weeks required to qualify for the deduction depends on whether you are an employee or self-employed.

There may be exceptions to this test in which you do not have to meet the time requirements such as disability or involuntary separation. Members of the armed forces are also excluded from having to pass both the distance and time tests as long as they are moving due to a military order or permanent change of duty station.

Once you figure out that you qualify to deduct the expenses on your tax return, tally up what it cost you to move all your household goods and personal effects as well as any storage expenses and the cost of traveling to your new home. All of these except meals are deductible. Visit the IRS website, Topic 455 – Moving Expenses, and see if you qualify for Uncle Sam to help ease the cost of moving. You can also look to the IRS Publication 521 for more specifics on requirements, how and when to report, and examples.

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