When are moving expenses tax deductible?

Moving Expenses Tax Deductible


When are moving expenses tax deductible?

It’s tax season - and if you’re moving, you might be able to get an even bigger rebate. Jonathan Francis, C.P.A. at
Cirillo, Francis & Cirillo LLP taught us what moving-related expenses we can write-off, and how to find out if we are eligible for these tax benefits.

What are the Most Common Moving Expenses that are Tax Deductable?”

Assuming that the expenses are not reimbursed tax free by their employer and it's a qualified move, a taxpayer can deduct from gross income the costs associated with moving themselves and their belongings. Another potential benefit might occur if the taxpayer moves to a different locality that may have a lower or non existent income tax rate. There are currently no other moving-related tax benefits I am aware of.

“When is a moving expense tax deductible?”

In order for moving expenses to be tax deductible, it needs to occur due to a change in employment or start of a new business and it needs to meet certain time and distance tests:

  • The timing needs to be closely related to the start of the new job or business (a move within a year of starting the new job or business would be considered closely related), AND
  • The new job or business must be at least 50 miles farther from your old home than your old job location was from your old home.
  • There are additional requirements regarding how long you must be employed subsequent to the move. Please refer to IRS Publication 521 for an expanded explanation.

deducting moving expenses 1040

“Which moving expenses are tax deductible, and which are not?”

The list of deductible expenses is a short one:

  1. The cost of moving household goods and personal effects (including the cost of in-transit or foreign move storage).
  2. Travel expenses (including lodging, but not meals) for ONE trip by the taxpayer and each household member.

“Does the cost of the moving expenses affect the value of the benefits?”

The greater the cost of the deductible moving expenses, the larger the tax savings.

There you have it! Finding out if you can deduct your moving expenses is very simple; just follow the criteria that Jonathan has provided. If you need more guidance on the topic, view the full 17-page IRS guide (publication 521) on deductible moving expenses.

For more tips on making the most out of your move, check out our blog, and follow us on Facebook & Twitter.

Thanks again to Jonathan and Cirillo, Francis & Cirillo CPA's for their help on this post.

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