Are Moving Expenses Deductible for a Job Transfer?
If you move for job reasons and meet the tests set by the Internal Revenue Service you can claim your moving expenses on your taxes. The deduction for moving expenses is an adjustment to income, so you can claim the deduction without giving up the standard deduction.
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Moving for Job Purposes
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You must move for an employment-related purpose to claim a deduction for your moving expenses. To meet the time test, the IRS requires that you work full-time as an employee for the first 39 weeks of the first year after you move. If you are self-employed, you also have to work at last 78 of the first two years after you move. For example, if you left your job a few weeks after your move and did not find another shortly thereafter, you might not work for 39 weeks in the first year and therefore would be unable to claim the deduction.
New Workplace Location
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To qualify you to claim the moving expenses deduction, your transfer must move you to a new workplace that is at least 50 miles farther away from your old home than your old workplace is. For example, if you previously commuted 20 miles from your old home to your office, your new office would need to be at least 70 miles from your old house. The distance from your new house to your new office is irrelevant for the purposes of the moving expenses deduction.
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Deductible Costs
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You can include the costs of moving yourself, your family and your belongings in the moving expenses deduction. When you move yourself and your family, you must take the most direct route. You can include the cost of lodging if you have to travel over multiple days, but not any meals. If you take a detour, such as to tour a city not on the way, your costs are limited to what you would have had to spend if you were taking the most direct route. When moving your items, you can also include the cost of storing them for up to 30 days before the items are moved into your home.
Employer Reimbursement
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If your employer is requiring you to move with a job transfer, your employer may offer to pay some or all of the expenses. When calculating your deduction, you cannot include any costs covered by your employer. For example, if you pay $3,000 to move your personal effects and $900 to move your family, you would qualify to claim a $3,900 deduction. However, if your employer reimbursed you $2,900, you could only write off $1,000 on your income tax return.
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