If you recently moved to another city for a new job or because your old job is now at a new location, a tax break may be coming your way.
Before you get too excited, your move must meet certain criteria of distance and time. If you can satisfy the tests, your job-related moving expenses may be deductible.
The Distance Test: Your new workplace is at least 50 miles further from your former home than your previous workplace was from that home. Example, if your old job was 5 miles from your former home, your new job must be at least 55 miles from that home.
The Time Test: You are required to work full-time for at least 39 weeks during the 12 months immediately after your move. If you are self-employed, the time test requires you to work full-time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after your move. You can deduct your moving expenses on your tax return even though you have not met the time test by the date your return is due if you expect to meet the 39-week or the 78-week test as required.
Exception: Members of the armed forces are not required to meet these tests if the move was due to a permanent change of station.
Reasonable moving expenses are deductible, including the costs of moving your household goods and personal effects to your new home. You can also deduct the expenses of traveling to your new home, including lodging costs. You cannot claim a moving expense deduction for expenses covered by reimbursements excluded from income.
If you have any questions, consult a tax professional or give us a call…410.941.0022