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You may be able to deduct your moving expenses if you moved due to a change in your job or business. If you qualify, you may deduct moving expenses whether you itemize deductions or not. To qualify, you must satisfy three requirements:
- Your move must be closely related to the start of your work
- You must satisfy the distance test
- You must satisfy the time test
Closely Related to Start of Work
Your move must be closely related, both in time and in place, to the start of work at your new job location. You can generally consider moving expenses incurred within one year from the date you first reported to work at the new location as closely related in time to the start of work.
If you do not move within one year of the date you begin work, you ordinarily cannot deduct the expenses unless you can show that circumstances existed that prevented the move within that time. You can generally consider your move closely related in place to the start of work if the distance from your new home to the new job location is not more than the distance from your former home to the new job location. If your move does not meet this requirement, you may still be able to deduct moving expenses if you can show either of the following:
- You are required to live at your new home as a condition of your employment
- You will spend less time or money commuting from your new home to your new job location
To satisfy the distance test, your new job must be at least 50 miles farther from your old home than your old job location was from your old home. If you had no previous workplace, your new job must be at least 50 miles from your old home. If you are a member of the armed forces and your move was due to a permanent change of station, you do not have to meet the distance test.
The distance between a job location and your home is the shortest of the more commonly traveled routes between them. The distance test considers only the location of your former home. It does not take into account the location of your new home.
To satisfy the time test if you are an employee, you must work full-time for at least 39 weeks during the 12 months right after starting your new job.
To satisfy the time test if you are self-employed, you must work full-time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after starting your new job.
Deductible expenses include only the reasonable costs of moving household goods and personal effects and traveling (including lodging) from your old home to your new home. It does not include expenses for meals. The moving expense deduction is a deduction against gross income rather than against adjusted gross income, so it increases the value of some other deductions that are discounted by a factor derived from the gross income.
Travel by Car
If you use your car to take yourself, members of your household or your personal effects to your new home, you can figure your expenses by deducting either:
- Your actual expenses, such as the amount you pay for gas and oil for your car, if you keep an accurate record of each expense
- The standard mileage rate, which should be found in the instructions for your particular tax form
Whether you use actual expenses or the standard mileage rate to figure your expenses, you can deduct the parking fees and tolls you pay to move. You cannot deduct any part of general repairs, general maintenance, insurance or depreciation for your car.
You can deduct moving expenses you pay for yourself and members of your household. A member of your household is anyone who has both your former and new home as his or her home.
You will need to keep accurate records of any expenses that you paid to move. You should keep receipts, bills, cancelled checks, credit card statements and mileage logs. Also, if your employer reimbursed you for any moving expenses, you should keep any applicable documents showing what was reimbursed.
Change of Address
When you change your mailing address, you need to notify the IRS.
Questions for Your Attorney
My employer reimbursed me for the cost of renting a moving truck, may I still deduct that cost from my taxes?
I had to break my lease so that I could move to another state where my new job is located, may I deduct the early lease termination fee that my landlord charged me?