10 Feb Moving Expenses – Dana Point Movers
How to Deduct Your Moving Expenses
It’s not unusual for our Dana Point movers to be asked about potential tax write-offs this time of year. The fact of the matter is that you can deduct moving related expenses under certain circumstances. This federal deduction is very complex, though, so you need to be sure that you meet all the requirements for the deduction before claiming it on your taxes. Here’s what you need to know.
First, it’s important to understand the point of this deduction. It’s meant for those who take a new job or get transferred to a new location with your current job. If you take a job or transfer far away from your home and need to move to shorten your commute, you may be eligible for this deduction. To find out, you need to pass the following two tests:
The time tests is actually two separate tests related to time. The first test has to do with when you move, and the second has to do with how long you keep your new job.
For the first, you generally need to move into your new home within a year of taking a new job or being transferred. Though this is the general rule, there are some ways around it. For instance, you can stay in your current home with a long commute for more than a year if you’re allowing your child to graduate from high school before you move. This is just one example. As long as you can prove you had good reason not to move for more than a year, you can claim this deduction.
For the second test, you need to stay at your new job for 39 of 52 weeks following your move. You don’t need to stay with the same employer, actually. If you do switch jobs, you just have to switch to a job that still meets the distance test, which we’ll talk about next.
For the distance test, the IRS says that your new job needs to be at least 50 miles further from your home than your old job was. Essentially, if your commute increases by at least 50 miles, you should meet the distance test.
The IRS requires that you use the shortest commonly-traveled distance between two places when calculating these distances. So use a mapping program to get the exact distance between your old home and your old job. Then find the distance between your old home and your new job. Subtract the first distance from the second, and if you get more than 50, you qualify for this deduction.
Of course, if you just added 100 miles to your commute, you probably don’t even need to do the math. You just know you qualify for this deduction. But if you’re cutting it closer, it’s best to determine exactly how far the distances are so that you can back up your claim on your taxes.
What Deductions are Allowed?
Once you get through the nitty gritty details of the time and distance tests, the IRS is actually fairly broad with the things you’re allowed to deduct. Any expenses directly related to your move can be deducted. This includes the moving package from your Dana Point moving company, as well as any personal expenses you incur for packing materials, boxes, etc.
Other allowable expenses include storage fees for up to 30 days if your new home isn’t ready to move into immediately. And you can claim mileage for taking your family vehicle or vehicles to your new home. You cannot, however, claim food-related expenses like the fast food you eat on the way to your new home.
How to Claim the Deduction
This is a complex deduction with lots of figures to include on your taxes. So if you’re thinking of taking it, it’s best to consult with a tax professional. If you moved at all for work-related reasons this year, bring it up when you’re filing your taxes, to ensure that you claim this deduction if you’re allowed.