Moving is not only physically demanding but also a 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. Therefore, we bring you a simple informative guide on tax-deductible moving expenses.
What are tax-deductible moving expenses and how do they work?
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 a deduction of moving expenses. If it has been a year since you’ve moved, you may claim moving expenses on your tax return. The Internal Revenue Service (IRS) 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 than 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.
What does this mean?!
Since you are moving because of your job, there are requirements you need to fulfill. It is the law honored by the employer. 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. This may apply to both situations. To one where you are being transferred to the new location by your company. And when 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.
Keep this in mind when booking a moving company. Yes, you are moving long-distance and you’ll be reimbursed for it. But this does not mean you should book any company and ignore the price. Your boss will be pleased that you took the effort and found a reasonable moving service. We will recommend cheap movers NYC as the best moving solution. Whether you are moving locally or long-distance, you’ll have only the premium service for a cheap price. Try it out, you won’t regret it.
The time test requirement has also several exceptions.
In case you meet these requirements, collect all your move-related receipts. Remember to make a note of all the money you spend on moving and mileage. There might even be some hidden moving costs that you might found out about later on. Note those as well.
- If you are being transferred to your employer’s request.
- Being a member of the armed forces and you are moving on orders.
- Health issues forcing you to terminate the employment.
These are the tax-deductible moving expenses!
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 in some situations. So, save receipts for each box and other packing supplies you have purchased. Also, pet transportation costs can be deducted. Then, limited storage costs. Up to 30 days starting from the moving day in case you cannot move into your new home immediately. As well as, transportation from the temporary housing to the permanent home. If you cannot move into the new home immediately after you have moved out of the old one.
Shipping costs for the car, motorcycle, boat and other costs associated with the vehicle as well. Including tolls, parking, etc. Travel organization and arrangements. The ones like 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. All other fees related to the change of address are also tax-deductible moving expenses.
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 travel. You’ll have to treat yourself and your movers from your pocket.
- Moving expenses that were previously reimbursed by your employer.
- Costs of buying a new home or selling the old one. Including the realtor, real-estate agent, and all real-estate related charges and fees.
- A security deposit if you are renting an apartment.
- Charges for entering the lease or breaking the lease.
Basically, all the organization and preparation you decide to do yourself while unemployed are not tax-deductible moving expenses. Examples are the moving services, cleaning, packing, renting vehicles and tools, and renting cheap storage NYC. On the other hand, you should communicate with the moving company. There are some perks, but they are the ones collecting tax returns on some of the services they provide.
Now you are ready for the move. With the knowledge of tax-deductible moving expenses, you’ll calculate your real moving costs much easier. Not to mention that you will open new possibilities by stretching out your moving budget. Something you might have not been expected. Be sure to make a proper moving checklist along with the inventory list. Follow and note down all the steps and keep track of your expenses adequately. Take care on while relocating and we wish you the best of luck!