What You Need To Know About Tax Deductions For Moving


You Might Be Able To Deduct Your Moving Expenses

Rarely anyone comes out of a move without an extreme case of exhaustion and a near empty wallet. While the former can be aided with a bubble bath and a few nights’ rest, the latter can be helped with a few forms for the Internal Revenue Service. That’s right—your moving expenses can be tax deductible, depending on your reason for moving, the distance of your move, and how long you stayed in the area. However, not all moves qualify, even if they are cross-country. Read on to find out if your move qualifies you for a tax deduction.

The Three Requirements

There are three main requirements that you will have to meet in order to deduct moving from your expenses:
  • Your move must be closely related to the start of work
  • You must meet the distance test
  • You must meet the time test
The first requirement is pretty self-explanatory. The distance and time tests simply expand on the idea that your move must positively impact your commute to work. The distance test states that, “your new workplace must be at least 50 miles farther from your old home than your old job location was from your old home” (IRS). For the time test, you must work full-time for at least 39 weeks during the first year that you’ve moved to that location. Because of these three requirements, it’s incredibly difficult to use this deduction if you are not moving for employment reasons. However, there are a few exceptions that are permissible and can allow you to deduct moving. SEE ALSO: 9 OrganizationTips To Make Your Move Easier

Military Exemption

Members of the armed forces, their spouses, and their dependents may be able to claim a moving deduction, even if they don’t satisfy the time or distance requirements. If the move was due to a military order and permanent change of station, you are most likely able to claim this deduction. Situations which allow active duty military to claim this deduction include:
  • Moving from your home to your first active duty post.
  • Moving from one post of duty to another.
  • Moving from your last point as active duty back to your home (or near it). This must occur within a year of ending your active duty.
In order to meet the requirements, spouses and dependents must move to one of the following:
  • The place of enlistment
  • A member’s, spouse’s, or dependent’s home of record
  • A nearer point in the US to the above two

Other Exemptions

If you are a retiree living abroad who is looking to move back to the US to retire permanently, you might qualify for a tax deduction even if you do not pass the required time test. You are considered permanently retired by the US government when you stop being employed full-time or self-employed for profit. Executors of a deceased person who also moved in the last year can deduct moving expenses on the deceased’s final return. If the decedent was working outside of the United States, the survivor may deduct moving expenses if these criteria are met:
  • The survivor is moving to a home in the United States
  • The move occurs six months or fewer after the decedent’s death
  • The survivor is moving from the decedent’s former home
  • The home was outside the US
  • The decedent’s home is the survivor’s home as well
SEE ALSO: 5 Red Flags That Indicate A Moving Scam

What Is Deductible?

There are two categories of deductible moving expenses:
  • Moving household goods and personal effects
  • Travel to your new home
Thirty days’ worth of storage expenses may also be deducted if your personal items and the items in your home are moved out of your current home and must be stored before moving to your new home. Keep all receipts and records of your expenses to deduct them. Moving can be a stressful time. It can cost you time and money that you are hesitant to spend. Getting a tax deduction for your moving expenses, though, might make your move a little more bearable.
Date of original publication:
Updated on: November 10, 2015

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