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A Tax Deduction for Moving Expenses

If you are moving, you need to know that your moving expenses may be claimed as a valuable tax deduction. The best part of this is that you can deduct qualifying moving expenses you pay, directly from your income, even if you do not itemize any other deductions. The catch is that this deduction is only allowed for individuals who incur qualified moving expenses that are not reimbursed by their employer, move for job related reasons, and the move must meet two requirements:

• Distance test: requires that your new job be 50 miles farther from your former home than your new home, and
• Full time test: requires that you be employed full-time in your new location for at least 39 weeks (78 weeks for the self-employed) after the move.

Most people who move need to know that out-of-pocket moving expenses, such as the actual costs of moving your personal effects and household stuff including the costs of packing, crating, shipping, transporting and storing your household goods can be ducted on your tax return. These deductible expenses can also include the cost of shipping your pets to your new home!

Other deductible moving costs include the costs of transportation and lodging for yourself and members of your household while traveling from your old residence to your new residence. Travel expenses can include either the actual costs of gas and oil for your vehicle or a rate of 22 cents per mile. You can also include parking fees and tolls. The best part of this is that you can claim the moving expense deduction as a deduction from your income even if you do not qualify to claim itemized deductions.

The IRS will not allow deductions for some expenses though. Moving expenses such as house-hunting expenses, the costs associated with the purchase of the new home, a loss on the sale of the old home, mortgage penalties, real estate taxes, loss of security deposits, temporary living expenses, forfeited tuition, car tags, or nonrefundable club dues may not be deducted.

So, providing that your move meets the distance and full-time tests, you can report the moving expenses incurred on Form 3903 and take a deduction for these on the front of your tax return. Get a copy of IRS Publication 521, Moving expenses, and set up a file to collect and record these expenses.