Tax Topics

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Job Related Moving Expenses

You may have changed jobs during the year or your employer may have transferred you to a new location. If your job change required you to move to a new location, and you meet the following qualifications, you can deduct your job-related moving expenses.

Moving Deduction Requirements

To qualify for a job-related moving expense deduction, your move must be closely related, both in time and in place, to the start of work at a new job location. You must also meet the specific requirements of the IRS Distance Test and Time Test.

Closely Related in Time

Generally, moving expenses incurred within one year from the date you first reported to work at the new location are considered closely related in time to the start of work. You do not need to have a job arranged before moving to a new location, as long as you actually do go to work within the year.

If you do not move within one year of the date you begin work, you ordinarily cannot deduct expenses unless you can show that circumstances existed that prevented your move within that time. For example, you delayed your move for 18 months to allow your child to complete high school.

Closely Related in Place

Generally, your move is closely related in place to your job if the distance from your new home to the new job location is not more than the distance from your former home to the new job location. A move that does not meet this requirement may qualify if you can show that you are required to live at your new home as a condition of your employment or that you will spend less time or money commuting from your new home to your new job location.

Distance Test

In general, your move will meet this test if your new main job location is at least 50 miles farther from your former home than your old main job location was from your former home. For example, if your former workplace was three miles from your former home, your new workplace must be at least 53 miles from that home.

Time Test

If you are an employee or a self-employed taxpayer, you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location. Additionally, if you are a self-employed taxpayer, you must work for a total of at least 78 weeks during the first 24 months after you arrive in the general area of your new job location. Full-time employment depends on what is usual for that type of work in the area.

To meet this test, you do not have to work for the same employer for all 39 weeks or be self-employed in the same trade or business for the 78 weeks. If you are an employee, the 39 weeks you work do not have to be sequential. You must work full time within the same general commuting area for all 39 weeks (all 78 weeks if self-employed).

You do not have to meet the Time Test if:
  • You are in the Armed Forces and you moved because of a permanent change of station (PCS orders)
  • You moved to the United States because you retired
  • You are the survivor of a person whose main job location at the time of death was outside the United States
  • Your job at the new location ends because of death or disability
  • Your job at the new location ends because you are transferred for your employer's benefit or laid off for a reason other than willful misconduct. For this exception, you must have obtained full-time employment and you must have expected to meet the test at the time you started the job.

Deductible Moving Expenses

You can deduct the reasonable expenses you pay in connection with moving your household goods and personal effects (including in-transit or foreign-move storage expenses) and traveling (including lodging but not meals) to your new home.

Household Goods And Personal Effects

You can deduct the following expenses for moving household goods and personal effects:

  • The cost of packing, crating, and transporting your household goods and personal effects and those of the members of your household from your former home to your new home
  • The cost of storing and insuring household goods and personal effects within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home
  • Any costs of connecting or disconnecting utilities required because you are moving your household goods, appliances, or personal effects
  • The cost of shipping your car and your household pets to your new home
  • The cost of moving your household goods and personal effects from a place other than your former home; your deduction is limited to the amount it would have cost to move them from your former home.

For example, Rosalita is a resident of North Carolina and has been working there for the last four years. Because of the small size of her apartment, she stored some of her furniture in Georgia with her parents. Rosalita accepted a new job and is moving to Washington, DC. It cost her $300 to move her furniture from North Carolina to Washington and $1,100 to move her furniture from Georgia to Washington. If Rosalita shipped her furniture in Georgia from North Carolina (her former home), it would have cost $600. She can deduct only $600 of the $1,100 she paid. The amount she can deduct for moving her furniture is $900 ($300 + $600).

Note: You cannot deduct the cost of moving furniture you may buy on the way to your new home.

Traveling

If you use your car when moving, you can deduct your actual expenses (such as gas and oil) as long as you keep accurate records of each expense. You cannot deduct any part of general repairs, general maintenance, insurance, or depreciation for your car. You may decide to take the standard mileage rate instead of claiming your actual expenses. Whether you use actual expenses or the standard mileage rate to calculate your expenses, you can still deduct parking fees and tolls you pay when moving. The standard mileage rate for moving is 23.5 cents per mile.

You can deduct the cost of transportation and lodging for you and members of your household while traveling from your former home to your new home using the most direct route. This includes expenses for the day you arrive at your new home. You can include any lodging expenses you had in the area of your former home the day your furniture was moved.

You can deduct expenses for only one trip per person to your new home. You do not need to travel with or at the same time as other members of your household. Each person is allowed one trip.

Nondeductible Expenses

The following is a list of expenses you cannot deduct as moving expenses:

  • Any part of the purchase price of your new home
  • The cost of buying or selling a home
  • Amounts spent obtaining or breaking a lease
  • Home improvements to help sell your home
  • Loss on the sale of your home
  • Meal expenses
  • Pre-move house hunting expenses
  • Security deposits (including any given up due to the move)
  • Storage charges except those incurred in transit and for foreign moves
  • Temporary living expenses

Completing Form 3903

If the moving requirements are met, complete Form 3903. The amount of deductible moving expenses from the form is then entered on Form 1040 as an adjustment to income.

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