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What You Need To Know About Writing
Off Moving Expenses
If you’ve ever
relocated, you know that moving isn’t cheap. Not only are moving
companies expensive, but the smaller things—traveling to your new home,
hooking up utilities, etc—are expensive as well, once you add them up.
However, if your
move is “work-related” you may be able to deduct some of those moving
expenses—large and small—on your taxes.
Before you starting
adding up all of the money you’re going save, however, you’ll need to
answer “yes” to three questions in order to qualify for the tax
write-off:
1. Is my move
work-related? The IRS defines
a work-related relocation as changing job locations (within the same
company), starting a new job at a new location, or moving in order to
find a new job. If you move to find a new job, you don’t necessarily
have to have a job right away; as long as you start at a job within one
year of moving, the IRS considers that type of move as being
work-related.
2. Will I continue
to work full-time? As long as
you work full-time for at least 39 out of the 52 weeks following your
move, you’ll meet this requirement. If you’re self-employed, you’ll also
have to work full-time at least 78 out of the following 24 months after
your relocation. These criteria are used to prove you moved because of
work, not because you simply wanted to move to a different area.
3. Is my job
location farther away?
Finally, to qualify for the tax deduction, your new job must be at least
50 miles farther from your current home than from your old job.
In other words, if your company transfers you to one of their divisions
85 miles from where you’re living now and assuming that your current
commute is 20 miles, you’ll qualify because your new job site will be 65
miles farther.
If you meet these
requirements, you can then move on to the next step: figuring out what
you can and can’t deduct:
What IS deductible:
The total cost of packing up and moving your possessions (including
insurance, storage for up to 30 days, and even tips for the movers), the
cost of disconnecting and connecting utilities at your old home and new
home, and the one-time cost of traveling to your new home (including, if
applicable, overnight lodging and 18 cents per mile if you drive).
What IS NOT
deductible: Any costs incurred
signing or breaking a lease, security deposits (either forfeited
deposits or new deposits), losses from club memberships terminated
early, car registration or driver’s license fees in your new county or
state, and all other costs associated with the actual process of buying
or selling a house.
Of course, even if you
qualify for this tax write-off, there are limitations and special
exceptions so you may want to consult a tax lawyer. Also, keep in mind
that you can’t deduct a work-related relocation if your company is
paying for your move. ∆ |
