Moving to a new home can be a stressful experience. After you finish finding boxes, packing everything up, and unloading it all, the tax impact of your move may be the last thing on your mind. In some situations, though, moving to a new residence can actually increase your tax refund. If you meet the IRS requirements, you can deduct moving expenses on your tax return.

Which Moving Expenses are Deductible?

According to the tax code, some moving expenses are tax deductible and some are not. Qualified moving expenses include the actual cost of shipping your items to the new home. This can include rental truck fees, vehicle towing (in certain instances) and shipping costs. You can also deduct the price of connecting your new utility services or disconnecting your old utilities during the move.

If you have to make use of a storage facility, you can deduct the first 30 days of your storage fees after your move has been completed. You can also take advantage of a mileage deduction that includes the cost of gasoline, repairs, and tolls as you to travel back and forth from your old home to your new one. If you have a lot of furniture to move, this could be a sizable deduction in itself!

Requirements for Claiming Moving Expenses

However, even if your moving expenses fall into one of the approved categories, your move must meet certain requirements in order to qualify for a tax deduction. First, you must move for work-related reasons. As an example, if you land a new job in a different city and have to move, your move will satisfy this condition. You also have to start at your new job within 365 days of the move itself to claim your expenses.

Another requirement to claim the moving expense deduction is that your new job has to be at least 50 miles farther away from your old home than your old job was. So - if your old home was 20 miles from your old job, then your new home has to be at least 70 miles from your old job location. Simply moving across town will not qualify as a tax-deductible moving expense. An important exception to this rule applies to unemployed individuals. If you have been unemployed and you move for work reasons, you don't have to meet the distance requirement.

How to Claim Moving Expenses as a Deduction

When you're ready to deduct your moving expense deductions, you'll need to use IRS Form 3903 to report them. After you list the individual expenses, you'll add up the total and transfer it to page 2 of Form 1040. The total deduction will be used to reduce your overall tax liability.

If you are planning to make a work-related move in the near future, don't miss out on a valuable tax deduction! Make sure you meet the IRS requirements for moving expenses and keep good records so you can claim your costs on next year's tax return.