1) Do You Qualify?
The IRS only allows you to write off your moving expenses if the move is for job-related reasons. If you are moving because of convenience, you will not be able to receive tax deductions for your expenses.
2) 39 Weeks
The IRS requires that you be employed full time for 39 weeks of the first 12 months of your move in the area of your new job location in order to qualify for moving deductions. It is not required to have spent the 39 weeks at the same job, but rather a full-time job in the area. You will not be penalized by the IRS if you are laid off or transferred again.
3) 50 Miles Rule
The IRS requires that your commute from your old home to your new job location be at least 50 miles longer than your commute from your old home to your old job. To give an example, if you lived 10 miles from your previous job site, your new job location would have to be 60 miles or greater from your old home. Anything less than the 50 miles rule and you will not be eligible to deduct your moving expenses, per IRS guidelines.
4) Employer Assistance
If your employer is footing the bill for your move, it will impact what moving expenses, if any, you are able to deduct from your taxes. If your employer is paying only a portion of your moving expenses, be sure to keep track of the costs.
5) Self Employment
You can still deduct your moving expenses if you are self-employed. If you own your own business, you will need to meet the standard 39 weeks/50 miles guidelines. If you are self-employed, you will likely be required to meet the 50 miles guideline, as well as a longer 78 weeks rule, meaning you will need to work full time in the new location for roughly 20 months to be eligible to write off your moving expenses.
6) Married Couples
For married couples, only one spouse needs to meet the aforementioned IRS criteria to qualify.
7) Deductible Moving Expenses
The IRS has a short list of allowed moving deductions. Here is an outline of what moving expenses you will want to keep track of to write off as tax deductions later on:
- Cost of packing and transporting household good and personal effects, whether you are moving yourself or hiring professional movers.
- Cost of insurance for your move.
- Costs to connect and/or disconnect utilities because of the move.
- Cost of one-days lodging expense at your old residence after your belongings have been moved.
- Cost of storing your belongings at a location that is not your old residence. This applies to storing belongings with a family member or in storage in another city where you had lived previously.
- Cost of storing your belongings for no more than 30 consecutive days after the move.
- Cost of one trip for you and your household members. You and your household members are not required to travel the same way or the same time.
- Costs of car travel; you can deduct your expenses for gasoline, oil, lodging parking fees and tolls. You can either itemize your expenses or choose to deduct 18 centers per mile. Deductions for meals, sightseeing or repairs, maintenance, insurance or deprecation on your vehicle are not allowed.