Relocating for a new job position is becoming more common than ever. At tax time, you may be able to deduct any costs you incur from moving, or lease a significant portion of them, from your taxable income. Moving expenses have to be related to a new job in order to qualify for a tax deduction.
In order to deduct expenses for relocating, you have to meet certain requirements set forth by the IRS.
- The new position must be 50 miles or more from your previous home then you originally traveled to your previous job. So, if you use to travel ten miles to work from your home, your new job site has to be at least 60 miles from your original home in order to deduct the expense.
- There’s also a time frame for deduction and relocation. In order to claim expenses incurred while moving, you must do so within one year of the date the report to your new job.
- You also have to work fulltime hours for a minimum of 39 weeks during your first year as an employee of the new job in order to qualify for deduction.
Self-employed taxpayers also have to meet the same time test. In the distance is, you have to work full time for 78 B during the first 24 months in the new location. As long as you expect to meet this requirement, you’re allowed to deduct your expenses even if your tax return is due before you met the time test.
Also, if you stayed anywhere (like a hotel) during your move, you are able to deduct lodging expenses. Travel expenses such as air fare, mileage, and tolls, are deductible one way. If you choose to ship your furniture and items, you can deduct those fees as well as the cost of packing. There’s even a chance that you can deduct the cost of storage. Also, if you paid to connect or disconnect any utilities those expenses may be deductible.
It’s important to note that if your employer reimburses you for relocation, you may have to include the reimbursement amount on your tax return.