Which moving costs can be deducted and under what circumstances
Tax Deductible Moving Expenses
Moving has many benefits and if your move was, or will be job related, you might be able to deduct some or all of your moving expenses.
If the company that is relocating you will be paying all the moving expenses, there will not be much, if anything to deduct. However, if you are footing the bill for all your moving costs, the Internal Revenue Service (IRS) has three requirements that you must fulfill in order to be eligible to deduct any expenses.
• Job related
Moving deductions are only applicable if you will be starting a new job, your move will be taking place due to job relocation, or you will be starting a new business. If you fit into these criteria, you may be entitled to moving expense deductions.
The IRS requires that the new place of work must be at least 50 miles greater than the journey it took from your previous home to your old job or job location.
During the first 12 months, if you are an employee, you must work for a total of at least 39 weeks, full-time. Work must commence instantly upon arrival in the vicinity of the new location of your place of work. You are not required to be in the same job for the full 39 weeks. However, you must remain in full time work within the same area.
If you are laid off or transferred, the IRS will not require the money to be returned.
For self-employed persons, like employees, you must also work for at least 39 weeks during the first 12 months and for at least 78 weeks during the initial 24 months. Work must commence instantly upon arrival in the vicinity of the new location of your place of work.
Deductible Moving Expenses
If your move fulfills the three requirements set by the IRS, here is an example of some of the moving expenses that can be deducted.
For a very through and detailed explanation of moving expense deductions allowed, which have been set by the Internal Revenue Service, it is important to view their Publication 521 which also includes a list of nondeductible moving expenses. You can also access form 3903 when the time comes to report your moving expenses.