Is moving in your future or recent past? You may be pleasantly surprised to find out that your move very well may be tax deductible. The catch? Just don’t overdo it. Last year alone, an estimated 11% of the American population moved. Moving isn’t cheap. If you qualify and play your cards right, you may be able to pack in some savings to help compensate the expenses.
Facts About the Moving Tax Break
If you’re not aware of some important facts about the IRS tax break for moving, you may miss out. Here are some vital things to be aware of:
- Work it. The reason for the move must be for a job. There are some modifications and exceptions that can be found on the IRS website.
- Go the distance. You must be moving for a job that is at least 50 miles further away from the house you are moving away from. You must also prove you will save time and money from your commute so you can’t just manipulate the logistics. The exception is if your employer requires you to live in the location that you are moving to and therefore it is a further distance.
- You must use it…or lose it. You must claim your moving expenses within one year of the job start-up. There are exceptions to the rule for those in the military and for individuals who have been laid off. See the IRS website for more details.
- No take backs. You cannot move, claim the move, and then move back because you are unhappy with the place you moved to. If you do move, you will need to amend your tax return.
- Time matters. You must work full-time for 39 weeks for the new company during the first year in order to claim the move. The weeks, however, do not have to be consecutive.
- Extra time for selfies. Self-employed individuals must work at their claimed job for at least 39 weeks during the course of the first year and 78 weeks or more in the second year to qualify.
- Prove it. Be sure to hang on to your receipts. Many write-offs apply such as your moving company’s tab, your transportation to the new place and even hotel bills incurred along the way. Pet transportation, hooking up your utilities and many other expenses are applicable too, so check the IRS website for more information.
- Don’t overdo it! If you get carried away, you may lose out entirely.
Moving Expense Money Matters
Knowing what you can, and cannot, claim can make a huge difference in your pocketbook. It can also help keep you from getting red-flagged when tax time comes.
Expenses You CAN Claim
- Services from a professional moving company
- Gas and oil to the location of your vehicle
- Supplies used for packing
- Insurance for the move
- Move-yourself pods and truck rentals
- 30 days of storage of belongings prior to being moved into the new home
- Hotel or motel bill during the move
- Moving help (such as a laborer)
- Travel expenses (but not meals)
Expenses You CANNOT Claim
- Meals during your move
- Penalties incurred for breaking a lease
- License plates for your new state
- Closing costs on your new house
- Travel expenses of house-hunting
- Multiple trips to new location (only one way per move is all that is covered)
- Expenses your employer covered
Unpacking the Savings
The task of figuring the deduction of the tax break isn’t that difficult if you know beforehand what does and doesn’t qualify. When tax time rolls around, you will be prepared and ready to reap the rewards in return. Reach out to Easy Moves for a free moving quote today.