How to get tax deductions for moving expenses
Moving can take a toll, especially in terms of expenses. Although moving services are costly, you can potentially earn a return on this expense by deducting it from your federal income tax. In addition, moving expenses are claimed as an “above-the-line” deduction. Which means they reduce your adjusted gross income on which taxes are based. To learn if you qualify continue reading or tips on how to get tax deductions for moving expenses.
First things first. The IRS will only allow deductions for moving expenses if it’s job related. Relocating for work suddenly got that much sweeter, right!? But wait, there are exceptions.
- You won’t have much to deduct from your taxes if your employer is covering all of the costs associated with your relocation.
- For couples filing jointly, only one spouse needs to meet the criteria to qualify.
- If you are employed by someone: You are required to be employed full time for at least 39 weeks during the first year after you move. That’s 10 months out of 12. The 39 weeks does not have to be spent at the same job, just at a full-time job in the same area.
If you are self-employed: You are required to work at least 39 weeks of the first 12 months and at least 78 weeks of the first 24 months following the move.
- Your new commute to work must be at least 50 miles greater than your old commute. Meaning, if you used to leave your home and travel 20 miles to get to work, you must now be traveling at least 70 miles.
- You can claim expenses associated with hiring a professional moving company to help you move. Costs for packing, crating, and transporting your personal property and household goods can be deducted. This includes shipping fees or fees paid for renting a moving truck and the cost of insuring your belongings during the move.
- You can deduct storage expenses if your belongings were kept in storage for up to 30 days because you were unable to move into your new home immediately after leaving your old residence.
- You can deduct fees that you paid to connect and disconnect your utilities at both homes.
- You can deduct expenses incurred while driving your car to your new place. Such as gas, oil, parking fees, and tolls. Instead of itemizing your travel costs, you can choose to claim 24 cents per mile traveled from your old home to your new place.
- If your family members happen to use a different form of transportation, like flying, both sets of travel expenses are deductible.
- You can only deduct one trip for you and your household members. You cannot deduct the cost of multiple trips.
- You can deduct one day of hotel expense in case it is a long trip from point A to point B. You cannot deduct expenses for meals, sightseeing, repairs, maintenance, or insurance.