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Tax Deductions – Buena Park Movers

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Can You Deduct Moving Expenses on Your Taxes?

The short answer is, yes. But only sometimes. The way to qualify for this particular deduction is actually quite complicated. But if you qualify, you could regain some of what you pay your Buena Park moving company for their services. First, though, figure out if you qualify for the deduction, and then consult with a tax professional to claim it.

The Basics

Essentially, in order to claim this deduction, you need to have moved for work-related reasons. You might qualify if you were transferred to a new location, started a new job, or changed jobs. If your new job or work location is further from your home than your old job, this deduction could be for you.

However, it’s not quite as simple as that. You actually have to meet two tests to determine if you qualify for this particular tax deduction.

The Time Test

The time test for this deduction actually has two parts. Part A has to do with how long after you get a new job you move, and part B has to do with how long you actually stay at your job.

To pass part A, you’ll need to move to a home closer to your job within 12 months of taking that job. Basically, you can’t be happy with a long commute for two years, suddenly decide to move, and then claim your moving expenses on your taxes.

You might be able to get around this, though, if you delayed your move for good reasons. For instance, if you’re waiting for your child to graduate from high school before you buy a new family home, you could still pass this test. Consult with a tax professional to check if your reasoning makes sense to the IRS.

For part B of the test, you’ll need to stay at your new job, or at least in the same job location, for 39 of 52 weeks following the move. You can actually switch jobs during this time, if you get another offer. As long as move of your jobs meet the following distance test, you’ll still pass this test.

Because this 39 week test is such a long one, you can actually claim this tax deduction before you actually meet this part of the time test. However, if you later wind up moving back to your old job or taking a job that doesn’t meet the distance test, you would have to pay the deduction back on the next year’s taxes.

The Distance Test

This test is basically your justification for moving in the first place. If your commute increases 50 miles or more, the IRS allows you to claim moving expenses for moving closer to your new job. The language is confusing, but the concept is fairly simple. The IRS says that in order to meet the distance test, your new job needs to be at least 50 miles further from your old home than your old job was.

To figure this out, put your old home address and your old work address into a mapping software. The IRS requires that you calculate the distance using the shortest commonly-traveled route. Then, calculate the distance between your old home and your new job. Subtract the second distance from the first. If the difference is 50 or more, you’ll meet the distance test.

Allowable Deductions

So what happens if you qualify for this deduction under both of these tests? What expenses can you deduct? The IRS is pretty loose here. You can deduct any reasonable expenses paid to your Buena Park movers, as well as personal expenses incurred in the moving process. For instance, if you do the packing on your own, you can claim the expenses paid for boxes and other packing materials.

You can also claim mileage for moving your family vehicle or vehicles to your new home. Plus, if your new home isn’t ready right away, you can claim up to 30 days’ worth of self storage rental fees. The only thing you can’t claim is any food your family eats during the trip, or any pizza bought for volunteer movers.

How to Claim the Deduction

This deduction is pretty complicated, so it’s one that’s best to consult with a tax professional. They will be able to guide you through the process of verifying and claiming this tax deduction.