Moving Expenses that may be Tax Deductible

Real Estate

You may be able to take some of your moving expenses as a tax deduction. Even though government regulations are stricter than they used to be, it is still possible to catch a break if you meet the following criteria:

Criteria For Tax Deductions When Moving

  • Your new job or job transfer is 50 miles farther from your new home than your old house was.
  • If you did not have previous employment, the new home has to be 50 miles from your old house.
  • Your move must make your commute shorter to work.
  • You are a member of the armed forces and had a permanent change of station.
  • If you’re working full-time—even if self-employed.
  • If you incur expenses within one year from the day you reported to work at your new job.

Sometimes, the required length of time is waived in cases of a new job for armed forces personnel, location transfer by an employer, those who lost a job through no fault of their own, and those returning to the United States from abroad when they retire.

Expenses are deducted directly from your adjusted gross income, instead of being included in itemized deductions. You may then take a standard deduction, if it’s to your advantage.

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What Are Qualified Tax Deductions?

  • Packing and transporting household goods
  • Mileage for use of your own car (or gas expenses)
  • Tolls and parking fees on the trip
  • Up to 30 days storage of household goods
  • Connection and disconnection of utilities
  • Transportation and lodging for yourself and members of your household while traveling to the new home

These items are no longer allowable: $3,000 more for up to 30 days temporary living expenses, house hunting trips and costs of selling an old home and buying a new one.

If your employer pays for your move, these payments of qualified moving expenses are excluded from your taxable income and should be noted with a code P in box 12 of your W-2. However, be aware that some employers pay the cost of items no longer allowed (temporary living expenses, house hunting trips, costs of selling a house), and those amounts must be included in your taxable income.

In order to write off your relocation costs, you have to use the long Form 1040 to claim them. You don’t need to itemize any other deductions. The costs are detailed on Form 3903 and the total transferred to line 27 of your return. You don’t need to complete Schedule A, meet any percentage-of-income thresholds, or deduction phase-outs.

With the rapidly changing tax codes, it is always recommended that you consult your accountant to inquire about deductible expenses. You will be pleasantly surprised if you do meet some of the requirements outlined above.

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