Deducting Moving Expenses From Taxes
Getting a brand new job and moving to a new location can help you get a fresh start. Besides the change, another benefit of moving is that in some cases the mover can deduct moving expenses at tax time.
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Work Requirement
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In order to deduct moving expenses the move must be prompted by a change in the location of your job or business. If your job is relocating you or you've decided to move your business office, you may be eligible to deduct your costs. Applicable costs include reasonable expenses of moving, which may include renting a truck, hiring a moving crew, buying supplies and paying storage fees. You cannot deduct the cost of meals associated with the move.
Distance Requirement
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To deduct moving expenses you must meet the distance requirement. The distance test says that you can only claim the deduction if the new job is at least 50 miles away from your old job and home. So as an example, if you drive five miles to work at your old job, the new job has to be at least 55 miles away from the old home to meet the requirement.
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Time Requirement
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Before taking the deduction you also need to meet the time requirement. This test says that you have to work full-time at the new job for a minimum of 39 weeks during the first 12 months after you move into your new home, and 78 weeks for the initial two years after moving if you're self-employed. Members of the Armed Forces do not have to meet the distance test or the time test if they must move because of a permanent change of station.
Where to Record the Deduction
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If you find that you're eligible for the moving deduction you must record the deduction on Form 1040 under the "Adjusted Gross Income" section. This deduction reduces adjusted gross income. First, fill out Form 3903, which asks you to list the total expenses related to transportation, storage and travel for your work-related move.
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