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Deducting Moving Expenses from Taxes

Posted on November 16, 2011 by

Want to lower your taxes?

If you are moving as a result of a new job or job relocation, keep all of your receipts. You might be able to deduct your expenses from your taxes, lowering the amount you owe in taxes.

Figuring out whether your move is deductible can be a little tricky, and we specialize in moving here, not taxes. Nevertheless, we can guide you in the right direction. Here’s what you need to know:

Requirements:

Payment – The first qualification for deducting your moving expenses from your taxes is having paid all the expenses yourself. If your employer paid for your move, don’t try to deduct the costs.

Time Limits – You may qualify to deduct your moving expenses from your taxes if you worked at least 39 weeks within the 12 months after your relocation. This is true even if your move was not work-related, as long as you did in fact have a full-time job during the 12-month period.

Distance Limits – If you new job is located at least 50 miles farther from your old home than your former job, you may be eligible to deduct your moving expenses. Sound confusing? It is. So, here’s an example:

Let’s say that your old house was in Sacramento and your new job is in San Francisco. Therefore, the distance between your old house and your new job is 90 miles.

Now let’s say that your old house and your old job were both in Sacramento and were 2 miles away from each other. Therefore, the distance between your old house and your old job is 2 miles.

The equation, then, is: 90 miles – 2 miles = 88 miles. This distance is greater than 50 miles, therefore, you’ve passed the distance test.

Which moving expenses are deductible?

  • Moving expenses for household goods and personal effects.
  • Necessary lodging en route to your new location.
  • Storage of household items (no longer than 30 days).

 

More Information: For more detailed information, check out the IRS’s website, which explains when moving expenses are deductible, or check with a tax specialist.

Learn other ways to save money moving.