What are the Requirements?
To deduct moving expenses, taxpayers must meet a distance test and a time test.
The Distance Test
Your new principal place of work must be at least 50 miles farther from your former residence than was your former principal place of work. More simply put: take the distance between your new place of work and your old residence and subtract the distance between your former place of work and your old residence. This difference must be at least 50 miles or more.
Example: Romeo recently moved in connection with a new job. His old job was 10 miles from his old home. His new job is 50 miles from his old home. Subtracting the 10 mile drive from his old job to his old home from the 50 mile drive from his new job to his old home leaves a difference of 40 miles, which does not qualify because this difference is less than 50 miles.
Example 2: Juliet recently moved in connection with a new job. Her old job was 4 miles from her old home. Her new job is 60 miles from her old home. Subtracting the 4 mile drive from her old job to her old home from the 60 mile drive from her new job to her old home leaves a difference of 56 miles, which qualifies because this difference is at least 50 miles.
If you had no former principal place of work, the new principal place of work must be at least 50 miles from your former residence. This test is much simpler to calculate!
The Time Test
If you are an employee, you must work full-time for at least 39 weeks during the first 12 months immediately following your arrival in the general area of your new job location. If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months immediately following your arrival in the general area of your new work location.
There are exceptions to the time test in case of death, disability and involuntary separation, among other things.
Special Exception for Members of the Armed Forces
If you are a member of the armed forces and your move was due to a military order and permanent change of station, you do not have to satisfy the “distance or time tests.”
What are Deductible Moving Expenses?
The term moving expenses means only the reasonable expenses:
- of moving household goods and personal effects from the old home to the new home
- traveling (including lodging) from the old home to the new home
- meals are NOT deductible
Moving expenses of individuals who move with the taxpayer (e.g., family members) are deductible if the individual has both the former residence and the new residence as his principal place of abode and is a member of the taxpayer’s household.
For foreign moves (moves outside the United States), the costs of moving household goods and personal effects to and from storage and the costs of storing such goods and effects for part or all of the period during which the taxpayer’s new place of work continues to be the taxpayer’s principal place of work.
If you have any questions on how this applies to you, please feel free to give us a call.
Buzzkill Disclaimer: This post contains general tax information that may or may not apply in your specific tax situation. Please consult a tax professional before relying on any information contained in this post.