Is Your Move Tax Deductible?
Moving From New York To Los Angeles
Is my long distance move tax deductible?
In December 2017 the tax reform law, The Tax Cuts and Job Act was signed, and deductions for moving expenses were removed. This means that individual taxpayers making a move from NY to LA for a job, no longer qualify for tax deductions on any move taking place January 1st 2018 – December 31st 2025. The only exception is if you are an active member of the armed forces and you move because of a permanent change of station.
What where the IRS tax deductible moving expense requirements?
If you met the below requirements set out by the IRS (Internal Revenue Service), some moving expenses for your move from NY to LA were tax deductible if it was job related, and prior to 2018. These expenses could be claimed on your federal income taxes.
Job related – If you are moving from New York to Los Angeles to start a new job, a new business, or being relocated for a job, you could claim moving expenses on your federal income tax.
Distance – The location of your new place of work needs to be at least 50 miles further than the commute from your old home in New York to the premises of your previous job.
Time – If you’re going to be a full time employee of a company, it is required that you work for a minimum of 39 weeks during the first year, or 12 months. Your new job must start immediately once you arrive in Los Angeles. You are not obliged to remain in the same job for 39 weeks, but to qualify for the tax deductible moving expenses, remaining in full time work within Los Angeles is a requirement. If during the first year you are transferred, or laid off, you do not need to repay any money to the IRS.
If moving expenses were not reported on your tax return, there is a possibility that you might have some money due to you. There is a window of time in which you can revise your return, it is advised to meet with a CPA who will ask the right questions, and determine if you are eligible to claim any of your moving expenses.
If you’re relocating for work and your company will be paying all your moving expenses, or reimbursing you for the costs, then you cannot deduct these expenses a second time when filing your taxes. If however you will be paying for all the expenses when moving from New York to Los Angeles, you can then claim these moving expenses.
What moving expenses are deductible?
If your move from NY to LA is job related, and you meet the criteria set out by the IRS to deduct moving expenses on your federal income tax, here is a list of some of the expenses you can deduct. Speaking with an accountant or professional tax advisor is always recommended if you need assistance filling out tax forms.
What happens if I’m self-employed?
If you’re moving to LA from NY to work as a self-employed person, you must fulfill the same requirements as a full time employee to be eligible for tax deductible moving expenses. Self-employed persons are also required to work for at least 78 weeks during the first 2 years, or 24 months. Your work as a self-employed person must begin as soon as you arrive in Los Angeles.
For up to date detailed information regarding moving expenses, the Internal Revenue Service Publication 521 provides current data.