The Bright Side to Moving for Work: Moving Deductions

July 28, 2016 : H&R Block

They say that moving is the third most stressful event in life, following death and divorce. However, although moving means searching for a new place to live, packing everything and generally being miserable, at least there are some possible tax deductions to cushion the blow.

There is some good news and bad news when it comes to moving tax deductions.

The good news is, moving expenses are considered adjustments to income, so they don’t have to be itemized (Score)!

The bad news is, to earn the moving tax deductions, the move has to meet some qualifications:

  1. The move must be for a job- So, the purpose of the move can’t be to ditch annoying neighbors or to get out of doing home maintenance. Although, this could be an added benefit. The move must be closely related to the start of work.
  2. The job has to be a certain distance away- Not surprisingly, the distance test is a little complicated. If the new job is at least 50 miles further from the old house than the old job was, then the move passes the distance test. This means if the old job was 10 miles from the old house, the new job must be at least 60 miles from the former house.
  3. The job must be held for a certain time after the move- Turns out quitting right away is not an option to get a moving deduction. Employees are required to hold their job for at least 39 weeks after the move, and people that are self-employed are required to work in the vicinity for at least 78 weeks of the first two years after the move. So no one fire themselves!

The tax law covers everything when it comes to qualifications for moving deductions. If someone meets all these requirements, however, what exactly is deductible?

  • Travel Expenses to the New Location: This includes lodging, airline tickets, fuel and road tolls. Regrettably, food is not a travel cost.
  • Packing and Shipping Costs: Boxes, tape, packing materials, moving and storage costs are all included in packing and shipping. This even includes the cost of shipping household pets.
  • Connecting and Disconnecting Utilities: Connection and disconnection fees required because you are moving are deductible.

Ironically, any expenses related to actually selling or buying a home, including a loss, are not deductible. So don’t break a lease, buy new furniture or set up anything and expect there to be a deduction.

To claim a deduction, fill out IRS Form 3903, and for more information, see the IRS Pub. 521.

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