What Moving Expenses May be Write-Offs?
You may be able to take your moving expenses as a tax deduction when you file your taxes. While IRS regulations may not permit all expenses, it makes sense to consult with your accountant to see if any of the below apply to your move:
1) Your new job or job transfer is at least 50 miles farther from your new home than your previous residence.
2) If you did not have a previous job, the new job has to be at least 50 miles from your previous residence.
3) Your move must make your work commute shorter than it was prior to the move—not longer.
4) You are in the armed forces and had a permanent change of station.
5) You will be working full-time (you expect to work at least 39 weeks out of the next 12 months) even if self-employed.
6) You incur expenses within one year from the day you reported to work at your new job.
The required length of time is waived in cases of a new job for members of the armed forces, those transferred by an employer, those who lost a job through no fault of their own, and those returning to the United States from abroad when they retire (or their survivors).
Instead of being included in itemized deductions, expenses are deducted directly from your adjusted gross income. You may then take a standard deduction if it’s to your advantage.
Qualified deductions may include the following but as with any tax advice, seek guidance from your accountant for these and other deductions that apply to your situation:
* Packing and transporting of household goods
* Mileage for use of your own car (or gas and oil expenses)
* Tolls and parking fees on the trip
* Up to 30 days' storage of household goods
* Disconnecting and connecting utilities
* Transportation and lodging for yourself and members of your household while traveling to the new home
No longer allowable: $3,000 or more for up to 30 days’ temporary living expenses, house hunting trips and costs of selling an old home and buying a new one.
For most taxpayers, expenses are deductible in the year you paid them, regardless of when you incurred the expenses.
If your employer pays for your move, these payments of qualified moving expenses are excluded from your taxable income and should be noted with a code P in box 12 of your W-2. Beware: some employers pay the cost of items no longer allowed (temporary living expenses, house hunting trips, costs of selling a house), and those amounts must be included in your taxable income. Your employer should add them to Box 1 of your W-2. Even if your employer is ignorant of the current standards, you are responsible include the payments in your taxable income and pay taxes on them accordingly.
In order to write off your relocation costs, you have to use the long Form 1040 to claim them. You don’t need to itemize any other deductions. The costs are detailed on Form 3903 and the total transferred to line 27 of your return. You don’t need to complete Schedule A, meet any percentage-of-income thresholds, or deduction phase-outs.