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Cutting Taxes – Corona Del Mar Movers

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How Can You Deduct Your Moving Expenses?

Often times, Corona Del Mar moving companies get asked whether moving-related expenses are tax-deductible. The answer is that sometimes they are. If you move for work-related reasons and meet two IRS tests for this deduction, you might be able to recoup some of your moving costs through a tax deduction. Here’s what you need to know:

The Essentials

To claim this deduction, you must meet two rather complicated tests, but they boil down to one requirement: you need to have moved for work-related reasons for a full-time job. If you take a new job, get transferred, or even move your business, you could qualify for this tax deduction. Here are the two tests you need to pass in order to qualify.

First, the Time Test

The time test is actually a two-part test that has to do with when you move and how long you stay at your new job or job location. You have to pass both parts to qualify for the deduction.

In part one, you have to move within 12 months of accepting your new job or being transferred. This is what the IRS considers a reasonable amount of time. But under extenuating circumstances, you might be able to pass this test even if you don’t move within a year.

For instance, what if your spouse works close to your current home, and is preparing to retire in 18 months? Or if your child will graduate high school 14 months after you take your new job? In these cases, your delayed move could be justifiable. Check with a tax professional to see if you’ll still qualify.

The second part of the time test has to do with how long you’re at your new job, or at least in your new job location. You need to work at your job for 39 of 52 weeks following your move to qualify for this part of the test. In other words, you can’t move, and then quit a month later, but still claim this deduction.

You can, however, change jobs in this time period. As long as your new job still meets the following distance test, you can still qualify for the time test.

Second, the Distance Test

This test tells you whether or not your new job is far enough from your old home to qualify you for the moving deduction. The IRS says that your new job must be at least 50 miles further from your old home than your old job was. In other words, in order to qualify for this deduction, you must add at least 50 miles to your daily commute.

The IRS says that you must use the shortest commonly-traveled route between your home and your job to calculate this test. To figure this, put your old home address and your old job address into a mapping software. Then, do the same for your old home address and your new job address. Subtract the first figure from the second. If the difference is 50 or greater, you qualify for this deduction.

Allowable Deductions

What expenses can you deduct if you do qualify for this deduction? Anything moving related counts, including money paid to your Corona Del Mar movers, funds you pay for packing materials, or even up to 30 days’ worth of self storage expenses if your new home isn’t ready right away.

If you move your own family cars to the new home, you can claim either expenses or standard mileage for this, as well. You just can’t deduct the cost of any food related to your moving day road trip.

How to Claim It

As with other deductions, this one can be complicated to claim, and it’s claimed on its own form. Since it’s so complex, and the qualifications for the deduction are so complicated, it’s best to consult with a tax professional if you decide to claim this deduction.