If you’ve relocated in order to start a new job or transfer locations for your current job, you may be able to deduct your moving expenses. You must be able to provide information to the IRS that shows that your move qualifies for these deductions. The kind of documentation that constitutes proof includes receipts and other documents regarding the move. Keep reading to learn how you can claim your moving expenses as a deduction on your taxes.
The Distance Test
If you’re moving to a new home or apartment in the same town where you currently live, you won’t qualify for the moving expenses deduction. The minimum qualifying distance is 50 miles between your new job and your former home. For instance, if you used to commute ten miles between your home and work, your traveling distance must be at least 60 miles after the move in order to meet the requirement. You are required to use the shortest travelable distance when calculating your route’s length.
The Time Test
The time test for deducting moving expenses calculates how many weeks of full-time work you put in during the 12 months after you’ve arrived at your new location. You are required to work at least 39 out of 52 weeks during this initial 12-month period. You’ll still qualify even if these 39 weeks are not consecutive or if the work is for multiple employers. The IRS defers to your industry standard with these requirements and does not require a specific number of hours or days within the full-time employee requirement.
The moving expenses deduction allows you to claim expenses you incur in order to transport your personal belongings and household items to your new location, even if they need to be shipped internationally. Be sure to keep all receipts from your move, including those for lodging, tolls, parking, and gas.
Traveling to your new home is also covered under this deduction. This includes costs for yourself and the other members of your household. If you traveled by car, in your personal vehicle, you can deduct the cost of gas, parking fees, highway tolls, and even oil. You can calculate these exactly, or, alternatively, the IRS allows you to use the standard mileage rate to calculate these costs. If your move is long distance and occurs by airplane or train, the IRS permits you to deduct the cost of airplane or train tickets and associated costs.
After you arrive, if your belongings need to be placed in a storage unit, the cost of renting this unit for 30 days is deductible on your taxes. Many states offer tax incentives to first-time home buyers. If you’re buying your first home in this new location, be sure to see if you qualify.
Claiming the Deduction
The moving expenses deduction is one of the very few that can be claimed before you know if you have satisfied the requirements. This is because the time test takes twelve months, which means that taxpayers cannot satisfy the requirements in the year of their move. The IRS has made this exception to allow people to claim this deduction in the same year of their relocation.
To claim the deduction, you’ll use IRS form 3093 to detail your moving expenses and submit it with your personal tax return. Document your move carefully, make sure you save your receipts, and you could receive a tidy sum in your tax return to help offset the costs of moving.