Moving is not only physically demanding, but also financially challenging mission. Those who move a lot know perfectly that moving can be really expensive. If you are moving with a high quality NYC moving company, the pricing is usually transparent, without hidden costs. On the other hand, moving on your own is likely to become unpredictable at some point and may cause some unexpected, additional costs.
The good news is that some of the moving expenses are tax deductible if your relocation is work-related. Only those who have been employed before the move are eligible for deduction of moving expenses. If it has been a year since you’ve moved because of the job, you may claim moving expenses on your tax return. IRS (Internal Revenue Service) has two basic requirements when it comes to tax deductible moving expenses – distance test and time test. The ”distance test” requires that your new home must be located at least 50 miles further that your previous workplace was from your old home. In case you didn’t have an official workplace and you worked from home, than the distance between the old home and new job must be at least 50 miles, which means that if your old home was located 15 miles from the old workplace, now your new job must be at least 65 miles from your old home.
According to the”time test” requirement you are supposed to have 39 weeks of full-time employment during the period of one year after the move. You can even work for different employers. Those 39 weeks don’t need to at the same company. Whether you are being transferred to the new location by your company or you are starting a totally new job you are entitled to deduct moving expenses from your taxes. Also, moving costs are deductible only if incurred within one year of starting a new job.
The time test requirement has also several exceptions in following cases:
- You are being transferred at your employer’s request.
- Being a member of the armed forced you are moving on orders.
- Health issues forcing you to end the job.
- In case you meet those two requirements, collect all your move-related receipts and make a note of all the money you spend on moving and mileage.
Moving costs that can be deducted include:
– Moving and packing of the personal items and household goods. Save receipts from any moving, storage or truck rental company whose services you are using. Even packing-related costs can be deducted, so save receipts for each box and other packing supplies you have purchased. Pet transportation costs also can be deducted. – Limited storage costs (up to 30 days starting from the moving day in case you cannot move into your new home immediately). – Transportation from the temporary housing to the permanent home (if you cannot move into the new home immediatelly after you have moved out from the old one). – Shipping costs for the car, motorcycle, boat and other costs associated with the vehicle (tolls, parking,…). – Travel organization and arrangements (transport, booking flights, car rental,…). – Transportation and lodging costs for you and your family from the old place to the new home. Just make sure to save receipts from the gas station and hotels. – Insurance fees for your goods in transit. – Costs of connecting and disconnecting utilities.
Which moving costs are not deductible?
Other than moving expenses that are not associated with your job, there is a list of moving costs that are not deductible.
- The cost of meals during the travel.
- Moving expenses that were previously reimbursed by your employer.
- Costs of buying a new home or selling the old one and real estate fees.
- Security deposit if you are renting an apartment.
- Charges for entering into the lease or breaking the lease.