Late summer and early fall can be a big season for moving. If you move this year to start a new job or if your job moved to a new location, you may be able to deduct moving expenses. You can even deduct work-related expenses if you move to a new location and do not yet have a job there.
You cannot deduct moving expenses if your employer pays all the costs of your move.
Before you take these deductions, make sure you qualify. You will qualify if you meet the following two requirements related to distance and time.
The Distance Requirement for Deducting Moving Expenses
The IRS requires that you incur a new commute increase of at least 50 miles to take this deduction. For example, if you commuted 15 miles to work from your former residence, your new job location must be at least 65 miles from your old home.
The Time Requirement for Deducting Moving Expenses
With its time requirement, the IRS states that you must work full-time in the new area for at least 39 weeks during the first 12 months after you relocate.
The IRS will allow some exceptions to the time requirement. For example, your family moved more than a year after you took a new job. You delayed the move because you wanted to enable a child to complete high school. In this case, the IRS will provide an exception.
If you are self-employed, the IRS requires that you work in the new area at least 78 weeks during the first 24 months after you relocate. To reach this 78-week time threshold, you can combine the time you work as an employee and the time you are self-employed.
Additional Info on Tax-deductible Moving Expenses
A married couple can take this deduction if one spouse meets these requirements.
The IRS provides for some exceptions to the rule. If you lose your job, you may qualify for a move without meeting all the requirements. In addition, if you lose a job and travel to a new city to look for a job, you can deduct those travel expenses.
Members of the U.S. Military, who move due to a permanent change of station, can deduct moving expenses without meeting the distance and time requirements.
What Can You Deduct as a Moving Expense?
You can deduct expenses directly related to your move, such as:
- Moving company fees
- DIY moving fees (truck rental, packing supplies, packing boxes, etc.)
- Moving help (if you hire folks to help you load or unload your truck)
- Moving insurance
- Storage for the goods at your new location (for up to 30 days)
- Mileage (at the standard IRS mileage rate, which is $0.17/mile for moving in 2017 )
- Transporting your auto and pets to the new location
- Costs to disconnect and connect utilities due to your move
- Travel expenses for one trip (not including meals, see below)
- Lodging expenses for one day
You cannot deduct the following as moving-related expenses:
- Costs related to selling your house (closing costs, Realtor fees, mortgage fees, etc.)
- Costs related to getting the property ready to sell (example: staging fees, property improvements, etc.)
- Meal costs you incur during the move
- Costs related to house hunting in your new location prior to your move
- More than one day of lodging
- Costs related to relocating your car registration
You can review the following IRS article for more information and a listing of the forms you need to complete. https://www.irs.com/articles/tax-deductible-moving-expenses
If you need help in completing this information or have any questions, please contact us.