Moving On Up: Tips On Deductible Moving Expenses

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You did it. After a long job search and lots of dead-end interviews, you landed a great new gig. Unfortunately, you’ll have to pull up stakes and move in order to be closer to this great new job. Good news: some of your moving expenses can be claimed as deductions on your tax return, which in turn will lower your overall tax liability. Read on for more information.

Requirements

First and foremost, your move must be for work-related reasons only. Ditching the old neighborhood in and of itself won’t cut it. You’ll also have to start your new job within 365 days of your move date.

Here’s where it can get tricky: your new job has to be at least 50 miles away from your old home. For example, if your old gig was 30 miles away from your old home, your new job will have to be at least 80 miles away from your old location.

If you’re unemployed, however, and if your move is strictly for a new job, you’re exempt from the distance requirement.

Qualified Expenses

These expenses are deductible moving expenses:

  • Connection fees for the utilities in your new home
  • Costs associated with disconnecting utilities and services at your old residence
  • Shipping costs, including truck rental fees, vehicle towing, shipping costs for sending household good to your new location.
  • First 30 days of storage fees if you rent a storage unit to stash your furniture and other goods
  • Lodging expenses near your new home if you can no longer stay in your old home and you’re not yet allowed to take occupancy in your new home

Check out IRS Publication 521 for more detailed information.

The How-To:

On tax day, be sure to complete and attach form 3903 to your return. Add up the total and transfer it to page 2 of your 1040 form. The overall deduction will lower your tax liability and in some cases, increase the amount of your return.

Landing a great new job in a new location can be stressful and exciting at the same time. Keep in mind that most of your moving costs will be tax deductible, provided they meet the requirements above.

 

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