How to Itemize & Deduct Moving Expenses
Since your job-related moving expenses deduction is taken as an adjustment to income for calculating your adjusted gross income it doesn't relate to the itemized deductions you claim on Schedule A. In fact, you are eligible to deduct your moving expenses regardless of whether you choose to itemize or claim the standard deduction. If you choose to itemize and deduct your moving expenses in the same year, the Internal Revenue Service requires you to file two additional forms with your tax return.
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Things You'll Need
- IRS Schedule A Form
- Instructions for IRS Schedule A
- IRS Form 1040
- IRS Form 3903
Instructions
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Evaluate which itemized deductions you are eligible for. The instructions to the Schedule A form lists every deduction that you can itemize as well as the requirements for each one. Some of these expenses include your mortgage interest payments, state and local income and property taxes, charitable donations, medical expenses and an array of unreimbursed job-related expenses.
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Calculate each deduction and report them on Schedule A. Once you determine which deductions you qualify to claim, you then need to calculate the deductible amount for each one. For example, if you are deducting mortgage interest, you should reference the 1098 form you receive from the lender since it will report your annual interest payments. After completing the calculation for each deduction, transfer the total to the appropriate line on the second page of your 1040 form.
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Evaluate whether you satisfy the time test. To claim a deduction for your moving expenses, the IRS requires that you work full-time for a minimum of 39 weeks during the initial 12-month period you are in the new location.
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Evaluate whether you satisfy the distance test. The IRS requires that your new job be at least 50 miles further from your former home than your previous job is from that same home. When evaluating the distance test, the location of your new home is irrelevant.
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Report all moving expenses on Form 3903. If you satisfy the time and distance tests, you need to report your moving expenses on Form 3903 and attach it to your 1040. Eligible moving expenses include the cost of transporting yourself and other family members to the new home, the cost of renting a moving truck or hiring a moving company to transport your personal effects and the cost of renting a storage facility for up to 30 days if you are unable to move into your new home immediately after moving out from the former one.
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Tips & Warnings
Make sure you prepare your tax return on the 1040 long-form. The IRS will not allow you to itemize your deductions or claim the moving expense deduction when using Forms 1040-A or 1040-EZ.
The IRS allows you to claim the moving expense deduction before you satisfying the 39-week work requirement. However, if after the 12-month period you realize you don't qualify for the deduction, you must amend your prior return to eliminate the deduction or increase your taxable income by the amount of your prior deduction in the following tax year.
