Tax Benefits of Moving
If you move because you are changing jobs, changing job locations, or starting a new job or business, you may be able to deduct certain types of reasonable moving expenses when you file your taxes. According to the IRS, moving expenses can be filed on Form 3903 and are considered above-the-line deductions, meaning they do not have to be itemized.
Qualifying for Moving Deductions
You must meet certain criteria to qualify for a moving expense deduction. These criteria include:
- Distance test: The distance between your new job location and your old home must be at least 50 miles farther than the distance between your old job and old home. If you did not have a workplace, the location of your new job must be 50 miles or more from your old home.
- Time test: During the first 12 months following your arrival to the new area, you must work full time for at least 39 weeks. Those who are self-employed must meet these same criteria, and must also work full time for at least 78 weeks during the first 24 months.
Military members who must move due to orders and permanent changes of station are exempt from the distance and time tests. Other exceptions to the time test may include involuntary separation, disability, or death.
Deductible Reasonable Moving Expenses
People who are moving due to a change in employment may be able to claim tax deductions for reasonable expenses related to moving. These reasonable expenses may include the cost of moving your household goods and personal items as well as travel costs. You may be able to deduct the costs of:
- Packing and transporting household goods and person items
- Transportation and lodging for yourself and household members, including the day you arrive in your new home. Meal expenses are not covered.
- Lodging expenses in the area of your old home for a one-day period after your furniture has been moved
- Connecting or disconnecting utilities
- Shipping cars and household pets
- Moving items from a place other than your old home, limited to the amount you would have paid to move them from your old home
- Storage expenses and storage insurance for a period of 30 days
Household members are not required to travel together or at the same time to qualify for the exemptions, but you may only deduct reasonable expenses once per person per trip. You may not claim deductions for meal expenses, any expenses covered by employer reimbursement not included in your income, the cost of moving furniture you purchase during your move, or the cost of any unnecessary excursions or stopovers during your move.
Before claiming these deductions on your tax return, be sure to read and understand the IRS rules and regulations about tax deductions for moving expenses.
Contact Us
The Austin moving professionals at Unicorn Moving & Storage are committed to quality customer service, and we strive to ensure that your move goes as smoothly and efficiently as possible. To discuss your moving needs, contact our offices at 512-339-9922.
