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. Thats rightyour 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 youve moved to that location.
Because of these three requirements, its 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.
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Members of the armed forces, their spouses, and their dependents may be able to claim a moving deduction
, even if they dont 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 members, spouses, or dependents home of record
- A nearer point in the US to the above two
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 deceaseds final return. If the decedent was working outside of the United States, the survivor may deduct moving expenses if these criteria are met:
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- The survivor is moving to a home in the United States
- The move occurs six months or fewer after the decedents death
- The survivor is moving from the decedents former home
- The home was outside the US
- The decedents home is the survivors home as well
What Is Deductible?
There are two categories of deductible moving expenses
Thirty days worth of storage expenses may also be deducted
- Moving household goods and personal effects
- Travel to your new home
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.