Are Relocation Expenses Tax Deductible?
Moving across the state or across the country requires a lot of time, energy and money. The Internal Revenue Service allows deduction of some moving costs when the relocation qualifies. Simply choosing to move into a new house or residence is not tax deductable. As with all tax deduction items, consult a CPA or tax professional before taking this deduction.
Other People Are Reading
-
Work Related Relocation
-
Per the 2011 IRS guidelines, taxpayers may deduct relocation expenses only in conjunction with relocation for employment. The relocation may be for a transfer in your current position to a new office, a new position with the same company to a new office or a new position with a new company. You may move and find a job once you arrive in the new location and still qualify. You do not have to find employment prior to the move. You may also deduct if you move to a new location and start a business.
Distance and Time Tests
-
You must satisfy both a distance and time test as well. The distance between your old home and your new job must be more than 50 miles farther than the distance between your old home and your old job. If your old job was three miles away from your old home, the new job must be at least 53 miles away from your old home to qualify. You must start the job within 12 months of the move unless you document a situation that prevented the move such as allowing children to graduate from high school. Employed workers must work at least 39 weeks out of the first 12 months to qualify.
-
Deductable Expenses
-
The IRS allows deduction of expense related to storing and transporting your home good and transporting yourself and your family. However, you may not deduct meals. You may deduct the actual expenses for travel or a per-mile basis. If your employer reimburses any portion of your move, you may not deduct it. If one or more people fly, you may deduct the cost of the airline ticket. You may not deduct costs to sell your home, buy a new home, deposits for utilities or rent or other items not directly related to moving your items and persons under this deduction. Some of these may be deductable under other sections of your return.
Military, Surviving Spouses and Retirees
-
Military, military families, surviving spouses and military retirees qualify for the deduction without the time or distance rules, if they provide orders for the relocation. A person retiring permanently may move once when she permanently retires and deduct the expenses without passing the distance or time test.
-
