Not every move is tax deductible, but if you are moving because of a job transfer many of your expenses will be eligible for a tax deduction. Find the allowed moving deductions in the Internal Revenue IRS Code Section 217. Report your moving expenses on IRS Form 3903 and Line 26 of Form 1040.
Keep in mind that if the company you work for is paying for your relocation expenses, they are the ones who will receive any tax deductions. Some expenses are related to a new job, a job transfer or even your first job.
You must remain employed full time for 39 weeks, which is approximately 10 months, of the first full year at your new location. If you are self-employed, you will be required to stay employed full time for 78 weeks, or about 20 months, of the first two years you are at your new location. This continuous full-time employment does not need to be at the same job.
Meals are never part of allowed tax-deductible moving expenses. Your move may be tax deductible if your new location is 50 miles or more of a commute from your old home to your new job. The mileage is calculated starting at your current home and driving to your new job location, not your new home location. For instance, if you lived 20 miles from your old job, your new job needs to be located at least 70 miles from your old home.
Following are five allowed deductions according to the Internal Revenue Service (IRS):
- Regardless of whether you hire a professional for the entire process or do it yourself, you can deduct the expenses incurred from packing and transporting your items. This includes the costs of having your cars shipped or transporting your pets.
- Automobile expenses related to the move. You can deduct actual expenses or opt to take a per mile deduction.
- One night of lodging costs is deductible.
- Costs involved in connecting or disconnecting utilities for a move is tax deductible.
- Expenses related to storing household goods up to 30 days after your move.