Yes, it costs money to move. But here’s good news. You may qualify for a tax deduction when you move for work. Here are the essential requirements:
- You incurred move-related expenses within one year of your first day on the new job.
- Your new principal workplace is at least 50 miles farther from your previous home than your old workplace was.
- If you work for someone else, you are employed full time in the general area of your new workplace for at least 39 weeks during the 12 months right after you move. If you are self-employed, you work full time in the general area of your new workplace for at least 39 weeks during the first 12 months and a total of at least 78 weeks during the 24 months right after you move.
There are caveats. One, if you don’t meet the work requirements by the filing deadline, you may still claim the deduction if you expect to meet them in the next tax year. Two, if you claim the deduction but fail to meet the requirements, you’ll need to later amend your return or report the amount as income for the next tax year. (There are exceptions for people who serve in the military or move out of the country.)
Some expenses are deductible. Some are not.
The IRS allows deductions for “reasonable costs.” But these do not include any expense for which you are reimbursed, e.g., those paid by an employer. Generally, here are the kinds of expenses you may deduct:
- transportation of your possessions, including automobiles and boats
- packing, crating and unpacking
- valuation expense (covers you against loss)
- storage in transit (up to 30 days each way)
- transportation of pets
- connection and disconnection of utilities
- travel and lodging en route to your new home (but not meals or sightseeing trips)
Want more details?
You can find more details in two IRS publications:
- Form 3029. This is the form you file to claim deductions for moving expenses.
- Publication 521. This bulletin provides a detailed explanation of how to ascertain your deduction.
The IRS also provides a toll-free line for answering questions and solving problems: 1-800-829-1040.
I am not a professional tax advisor, so the information in this blog post is just a snapshot for general reference. It is not intended as tax advice. Before you claim deductions for moving expenses, talk to your accountant or other advisor about your situation.