Moving because of work is a big undertaking, and the cost to move can add up quickly. Depending on the timing and nature of your move, you may be able to deduct some expenses on your tax return. Of course, you don’t want to claim any deduction for which you do not qualify. Here’s how you can determine which expenses are tax-deductible and which are not:
Not everyone can deduct moving expenses on their taxes. Before you start entering these expenses on your tax return, you need to make sure you meet the minimum qualifications.
The IRS will only allow you to claim your expenses if the move closely correlates with the start of a new job. Your move must happen within 12 months of accepting a position. Furthermore, taking the new job must add at least 50 miles to your regular commute. Finally, after moving, you must remain employed for at least 39 weeks during the first year and work full-time.
During your move, make sure you keep a paper trail of all your expenses. After all, the IRS may ask for proof down the road. Be sure to keep copies of receipts, mileage logs, canceled checks, or credit card statements to back up your claim. You can deduct reasonable expenses on your move, but the IRS does limit what they consider to be acceptable.
You can deduct the cost of transportation for you and your family during your relocation. If you need to find additional lodging during your move, this expense is also deductible. Even the cost to pack and ship your belongings is a valid tax deduction.
However, not every expense related to your move is tax-deductible. You should not try to write off the price of your new home. Fees from breaking a lease or selling your house are also not deductible. Deducting meals or impulse purchases during your move is also not allowed.
If you move for work this year, you may be able to file Form 3903 to deduct moving expenses from your taxes. Make sure your deductions are all valid, and always keep proof in case the IRS decides to verify your taxes.