Discovering How and When to Deduct Your Moving Expenses on Your Tax Return

By Top Tax Staff | Aug 17, 2016 7:30:00 AM | Tax Tips and Help

    

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Packing up and moving to a new home can take its toll on your budget. You may be distressed at having to spend so much money relocating to a new city for your job. However, the IRS permits you to recoup some of these costs by claiming them as deductions on your taxes. Before you file your return, however, you should learn under what circumstances you can deduct moving expenses on your taxes.

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Criteria for Deducting Moving Expenses

The IRS has outlined specific criteria for people who want to deduct their moving expenses on their tax returns. It requires that you meet three circumstances before you can recoup your costs.

The first circumstance requires that the move be related to starting a new job or having your current job transferred to another location. You must have incurred these costs within one year of moving to the new location for work. Further, your new home must be the same or a lesser distance between your old home and your former work location.

The second circumstance outlined by the IRS requires that your move meets the required distance. You must have moved at least 50 miles from your old home to start your job. Alternatively, your new work location must be greater than 50 miles from your home than your former job site.

The final requirement involved with deducting moving expenses centers on you working the mandatory number of hours at your new job. The IRS stipulates that you must have worked at least 39 hours per week for the prior 12 months following your move to the new location. You also must have worked at least 78 weeks in the last 24 months.

The IRS does allow for some exceptions to the time requirement, however. These exceptions include:

  • Disability
  • Death
  • Involuntary separation
  • Other qualifying circumstances
If you can satisfy these three requirements, you can proceed with deducting your moving expenses on your tax return. It should be noted, however, that you do not have the meet the time or the distance requirement if you are in the military. You can proceed with making these deductions if you are deployed or relocated to a new city or military base.

Allowable Moving Expense Deductions

You may wonder exactly what kinds of expenses you can claim on your return. The IRS is specific in what costs it will allow you to recoup. Some of the more common deductions you can claim include:

  • Costs of transporting your personal effects and household items
  • Storage unit rent for up to 30 days
  • Costs for oil, gas, highway tolls, parking fees, etc if you use your personal vehicle
  • Airline or train tickets

Rather than itemize your expenses for oil, gas, tolls, parking fees, and other costs for using your personal vehicle to move, you can instead use the IRS standard mileage rate. You can deduct these and other allowable expenses by completing IRS Form 3903.

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Exceptions to Claiming Moving Expenses

The IRS has established several notable exceptions to claiming moving expenses on your taxes. Primarily, you are unable to deduct these costs on your return if your employer reimburses you for them. If your company pays you back for the costs of moving, you cannot recoup this money a second time by using them as tax deductions.

Second, if both and your spouse are moving because of work, only one of you can claim the expenses on your taxes. You must stipulate which spouse is claiming the deductions when you file your taxes.

Moving can be an expensive undertaking. You can reclaim qualifying costs by using them as deductions on your taxes.

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