When you're contemplating how to finance an unexpected move, knowing you'll save on your next income tax bill can take the sting out of spending your savings. But before you assume that you're going to be able to take the deduction, you need to make sure you qualify and know what paperwork to keep on hand to prove your eligibility. Get a moving related deduction the right way with these tips.
Claiming the Right Costs
You should start by making sure you're only applying the right expenses. Only travel expenses, minus meals during travel, and physical moving costs can be deducted. Your moving company can provide you with a full itemized bill that breaks down every charge to verify that you're claiming the right amount on your taxes. Quotes won't work for this, so make sure you hold on to all of the paperwork you receive from your moving company for seven years after filing your taxes. You may be able to request a replacement bill from the company if necessary in the future, but it's better to have your own copies since the moving company is not required to keep them on file for you.
Getting One Easy Bill
For the most streamlined tax deduction process, purchase everything for the move through your moving company. Let them buy the boxes, bubble wrap, and other miscellaneous materials and include it all on your bill for the moving services. This provides you with a single document that includes every fee related to the physical move itself. You still have to track your travel expenses separately, but you can also take a standardized deduction based on mileage instead. There's no standardized amount for moving costs, so it's best to keep those all on one bill.
Meeting Work Requirements
The IRS has a number of requirements you must meet before being able to deduct moving expenses. The first is that the move must be related to a change in work, such as a start of a new job or the transfer to a position at a different location. If your employer requests that you transfer, that satisfies this requirement. You don't need to have a job lined up before you move either. As long as you get a job and meet the employment requirements in the year following the move, you likely meet this condition set by the IRS.
Staying Employed Full-Time
Making a move for work related reasons isn't enough to make your costs tax deductible. You'll also need full-time employment for at least 39 out of 52 weeks for the year following the move. This can be satisfied with multiple jobs or just one position with one employer.
Proving the Distance
The third and final requirement set by the IRS is simple enough, but remains tricky to actually calculate. The IRS wants you to first determine the commute you used to use to travel between work and your old home. Once you know that, you need to measure the distance between your old home and your new workplace. The second number must be higher than the first by at least 50 miles in order to qualify.
For example, imagine an original commute of 20 miles one way to reach work. This means that your new workplace must be at least 70 miles away from your old home in order for you to deduct your moving costs.
Finally, keep track of any reimbursements made by your employer that are related to your move. You can't deduct these fees or costs, but you can still make a claim for anything they didn't cover. If you didn't pay a cent for moving your items but still paid for your own gas to drive to your new home, you still have an opportunity to make a deduction.
For more information or assistance, contact a local moving company.Share
20 November 2017
I still remember when I moved into my very first apartment after I graduated from college. All I had to move were a few boxes of my belongings across town and then wait for the furniture company to drop off my new furniture! I soon found out that the longer you live in one place, the more "stuff" you end up having. The next time I moved, I remember feeling very overwhelmed and didn't have anyone go give me good moving advice. I know there are other people like I was and facing a difficult move without a lot of people to help. I want to help make everyone's moves easier by making a blog with my moving tips. I plan to post new advice frequently, so come back when you need moving help!