Internal Revenue Service has offered tips to individual taxpayers on the moving expenses they may be able to deduct on their tax returns if they make a work-related move, either to start a new job or to work at the same job in a new location.
In order to deduct moving expenses, a taxpayer must meet three requirements. Firstly, the move must closely relat...e to the start of work. Generally, moving expenses can be considered within one year of the date of first reporting to work at a new job location.
Secondly, there is a distance test, as a taxpayer's new main job location must be at least 50 miles farther from a former home than a previous main job location, while, thirdly, after a move, a taxpayer must work full time at the new job location for at least 39 weeks during the first year.
Self-employed individuals must meet the distance test, but must also work full time for a total of at least 78 weeks during the first 24 months upon arriving in the general area of their new job location. If an income tax return is due before a self-employed taxpayer has satisfied this requirement, allowable moving expenses can be deducted if the time test is expected to be met.
In addition, transportation and lodging expenses (but not the cost of meals) can be deducted for a taxpayer and household members while moving from a former home to a new home, as can the cost of packing, crating and transporting household goods and personal property, and the costs of connecting or disconnecting utilities.
However, any part of the purchase price of a new home, the costs of buying or selling a home, or the cost of entering into or breaking a lease, cannot be deducted as moving expenses, and, if an employer reimburses the costs of a move for which a deduction was taken, the reimbursement may need to be recorded as income on a subsequent tax return.