Moving? Advantage – tax deductions

Moving for your job?

Income tax deductions may help you cope with the stress of packing and the pain of leaving your home.

When you move, you can deduct two types of expenses:

  1. Moving household goods and personal effects from the former residence to the new residence, and
  2. Traveling, including lodging during the period of travel, from the former residence to the new residence

The taxpayer may also deduct moving expenses of household members whose principal residence, both before and after the move, is the taxpayer’s residence.

The move must be related to starting work at a new job or associated with self-employment opportunities. The moving expense must be incurred within one year from the time the taxpayer begins work at the new job. Sometimes the Internal Revenue Service will make exceptions to this one-year rule based on the facts and circumstances of a particular case.

Some examples of traveling expenses are fees for airline tickets for the taxpayer and the taxpayer”s family and the cost of hotel accommodations if an overnight stay is required.

When you travel by car, you have a choice of deducting your out-of-pocket expense or a standard mileage rate. The standard mileage rate in 2015 is 23 cents per mile.

Moving includes the expense of transporting household goods, furnishings and personal effects of the taxpayer and members of the household, as well as expenses of packing, crating and in-transit storage and insurance for such goods and effects.

Paying a moving company to perform all of these services for you is deductible as long as the fee charged is reasonable.

To deduct any moving expense, you must meet both a time and a distance test:

  • The distance test is met if your new principal workplace is at least 50 miles farther than your old workplace from your former home.
  • The time test is met if you work as a full-time employee in the general area of your new workplace for at least 39 weeks during the 12-month period starting right after you move.

Moving expenses are deducted on page one of your Form 1040 return, so you do not have to itemize to receive this tax benefit.