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Zaher Fallahi, CPA, Tax Attorney; IRS offers tax tips on Moving Expenses

posted Sep 11, 2016, 9:13 PM by Zaher Fallahi

Did you move due to a change in your job or business location?  You may be able to deduct your moving expenses, except for meals. Here are the top tax tips for moving expenses. In order to deduct moving expenses, your move must meet three requirements:

 

1- The move must closely relate to the start of work

Generally, you can consider moving expenses within one year of the date you start work at a new job location. Additional rules apply to this requirement. 

 

2- Your move must meet the distance test

Your new main job location must be at least 50 miles farther from your old home than your previous job location. For example, if your old job was three miles from your old home, your new job must be at least 53 miles from your old home. 

 

3- You must meet the time test

 After the move, you must work full-time at your new job for at least 39 weeks in the first year. If you are self-employed, you must meet this test and work full-time for a total of at least 78 weeks during the first two years at your new job site. If your income tax return is due before you have met this test, you can still deduct moving expenses if you expect to meet it.

 

If you can claim moving expenses deduction, here are a few more tips from the IRS: 

 

1-Travel

You can deduct transportation and lodging expenses for yourself and household members while moving from the old home to your new home. You cannot deduct your travel meal costs during travel. 

 

2- Household goods and utilities

 You can deduct the cost of packing, crating and shipping your things. You may be able to include the cost of storing and insuring these items while in transit. You can deduct the cost of connecting or disconnecting utilities. 

 

3- Nondeductible expenses

You cannot deduct as moving expenses any part of the purchase price of your new home, the cost of selling a home or the cost of entering into or breaking a lease. See IRS Publication 521 for a complete list. 

 

4- Reimbursed expenses

 If your employer later pays you for the cost of a move that you deducted on your tax return, you may need to include the payment as income. You report any taxable amount on your tax return in the year you get the payment. 

 

5- Address Change

When you move, be sure to update your address with the IRS and the U.S. Post Office by filing Form 8822, Change of Address.

Zaher Fallahi, CPA, Tax attorney, advises taxpayers including Americans-living abroad, with their taxes, IRS representation, foreign accounts (FBAR, FATCA, OVDP, foreign trusts). Telephones (310) 719-1040 (Los Angeles), (714) 546-4272 (Orange County), or e-mail to:  taxattorney@zfcpa.com
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