Can you deduct the cost of moving in the tax return?
If you move out, you can deduct the cost of the move on your federal tax return next year. This can be applied if you move to start a new job or at the same job but in a new location. In order to deduct your moving expenses, it must meet three requirements:
- Your move must be directly related to the start of a job.
In general, moving expenses can be considered within one year of the date you started working at the new place of employment. Additional rules apply to this requirement.
- Your move must meet the distance test.
Your new main job location must be at least 50 miles farther from your old home than your previous workplace. For example, let’s say your old job was three miles from your old home, your new job must be at least 53 miles from your old home.
- You must meet the test of time.
You must work full time in your new job for at least 39 weeks the first year of the move. If you are self-employed, you must also comply with this test. You must also work full time for a total of at least 78 weeks during the first two years in the new workplace. If your tax return expires before you have completed this test, you can deduct the moving expenses, if you expect to meet the requirement.
If you qualify, what is the next step?
You can deduct transportation and accommodation expenses. This applies to you and other household members while you move from your old home to your new home. You should not deduct your food expenses during the trip.
- Household items and public services (water, electricity and gas)
You can deduct the cost of packing, packing and shipping of your belongings. This could include the cost of storage and insurance of these products during transportation. You can deduct the cost of connecting or disconnecting public services from the old and new homes.
- Non-deductible expenses
You cannot deduce:
- Any part of the purchase price of your new home.
- The cost of selling your home
- The cost of entering or breaking a lease.
- Expenses reimbursed
If your employer then pays you for the cost of the move you claimed on your tax return, you may have to include the payment as income. Report any taxable amount on your tax return in the year you receive the payment.
- Change of address
When you move, be sure to update your address with the IRS and the United States Postal Service. To notify the IRS, file Form 8822, Change of Address (in English).
See Publication 521 – Moving Expenses for more information on these rules.