Summer is a popular time to move, whether it’s so the kids don’t have to change schools mid-school-year, to avoid having to move in bad weather or simply because it can be an easier time to sell a home. Unfortunately, moving can be expensive. The good news is that you might be eligible for a federal tax deduction for your moving costs.
You must pass the tests.
You must move closely related both in time and place to the start of work at a new location. There is a distance test and a time test. You may 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 are an employee you must work full-time for at least 39 weeks during the first 12 months immediately following your arrival in the general area of your new job location.
There are exceptions that are detailed in IRS Publication 521.
IRS Tax Topic 455 provides information on this issue. The details for self-employed people and members of the military are beyond the scope of this article.
So which expenses can be written off? Generally, you can deduct transportation and lodging expenses for yourself and household members while moving.
You may use IRS Form 3903 to deduct moving expenses as an adjustment to income on your federal income tax return.
In addition, you may be able to deduct the cost of packing and transporting your household goods and other personal property. Costs related to connecting or disconnecting utilities may also be deductible.
If your employer later reimburses you for any of the moving costs you’ve deducted, you may have to include the reimbursement as income on your tax return.
Your moving expenses related to your job or business may be more complex than those addressed in this article and the IRS resources we have provided to you here. We have a team of people with experience in advising clients on maximizing the tax benefit of moving expenses related to your job or business.
We highly recommend you confer with your Miller Kaplan advisor to understand your specific situation and how this impacts you.