Can I Claim Moving Expenses on My Taxes?

You can claim a tax deduction for moving expenses as long as you meet several IRS requirements

Moving is a real pain in the butt, there’s no changing that. But a nice deduction from the IRS can take the sting out of it.

That’s right, you may be able to deduct the cost of packing and shipping your stuff as well as traveling and lodging (but not meals).

In order to claim these expenses, however, you must meet several IRS requirements that ensure your move was required for business. That’s right, not every move qualifies. You can only claim the deduction if you move to start a new job or seek work in a new city, and you can only deduct expenses that were not reimbursed by your employer.

In addition, you must pass two IRS tests: the distance test and the time test.

The distance test

The distance test requires that the location of your new job be at least fifty miles farther away from your old home than your old job. In other words, if you were to remain at your old home, your new commute would be at least fifty miles longer than your old commute. This test is to ensure that your move is in fact work-related, and you’re not just moving to a bigger or nicer home.

The time test

The second test you have to pass mandates that you work full-time for at least thirty-nine weeks during the twelve months following your move. The rules of the time test differ slightly for the self-employed.

Thankfully the IRS is not too draconian in its enforcement of the time test. If your employer transfers you again after your original move or you get fired, the IRS will not hold you to your time test obligations.

Special cases

Those merely looking for a job, must still pass the two tests. Whatever job you find must be at least fifty miles from your old home and you must work at least thirty-nine weeks of the next year.

Slightly different rules apply to the self-employed. If you own your own business, you can claim the moving expenses deduction, but the distance of your move must be at least fifty miles and you must work full-time in your new area for at least seventy-eight weeks of the next two years.

Retirees who are moving from another country to the United States can also claim this deduction. Obviously they don’t have to start work at another job once they get here.

How to file

You can claim these expenses on Form 3903 [Moving Expenses] and also report the totals on line 26 of your 1040. Fortunately moving expenses constitute an above-the-line deduction which means that you don’t need to itemize deductions in order to claim it.

Have you moved recently? Be sure to claim your expenses when you file an online tax return.

Photo via Bill Ohl on Flickr.

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