Job-Related Moving Expenses Can Be Tax-Deductible

August 11, 2011 bigbeartaxlady

If you’re moving due to a job transfer or change, your moving expenses can be deductible as an above-line tax deduction. Here are the IRS Rules:

1. Move must be closely related to start of work Generally,
   you can consider moving expenses incurred within one year from the date you
   first reported to a new location, as closely related in time to the start of
   work.
2. Distance Test Your move meets the distance test if your new
   main job location is at least 50 miles farther from your former home than your
   previous job location was.
3. Time Test You must work full time for at least 39 weeks
   during the first 12 months after you arrive in the general area of your new job
   location, or at least 78 weeks during the first 24 months if you are
   self-employed. If your income tax return is due before you’ve satisfied this
   requirement, you can still deduct your allowable moving expenses if you expect
   to meet the time test in the following years.
4. Travel You can deduct lodging expenses for yourself and
   household members while moving from your former home to your new home. You can
   also deduct transportation expenses, including airfare, vehicle mileage, parking
   fees and tolls you pay to move, but you can only deduct one trip per person.
5. Household goods You can deduct the cost of packing, crating
   and transporting your household goods and personal property. You may be able to
   include the cost of storing and insuring these items while in transit.
6. Utilities You can deduct the costs of connecting or
   disconnecting utilities.
7. Nondeductible expenses You cannot deduct as moving
   expenses: any part of the purchase price of your new home, car tags, drivers
   license, costs of buying or selling a home, expenses of entering into or
   breaking a lease, security deposits and storage charges except those incurred in
   transit.
8. Form You can deduct only those expenses that are reasonable
   for the circumstances of your move. To figure the amount of your moving expense
   deduction use Form 3903, Moving Expenses.
9. Reimbursed expenses If your employer reimburses you for the
   cost of the move, the reimbursement may have to be included on your income tax
   return.
10. Update your address When you move, be sure to update your
    address with the IRS and the U.S. Postal Service to ensure you receive refunds
    or correspondence from the IRS. Use Form 8822, Change of Address, to notify the
    IRS.

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