Moving Expense Tax Deductions

Moving Expense Tax Deductions
Erik Scheetz
Erik Scheetz
March 4, 2015
Table of Contents

Saving money on a move is important no matter your budget, and getting a tax break on your next move is easier than you think. The government considers this type of tax deduction an above-the-line tax deduction, which means it's not necessary to itemize your eligible expenses like money paid to moving companies and spent on packing supplies.

The Government Helps When You Get a New Job

If you're starting a new job in another city and need to work with movers in San Antonio, the government may help you get back some of the costs associated with moving by giving you a break on your taxes.

Some of the eligible expenses you may be able to deduct include the cost of packing your home, money spent shipping your property, and associated costs for lodging while traveling to your new home. If you require assistance moving an office, the expenses of hiring office movers may also count toward your total moving expenses. Tax accountants call these costs "qualifying expenses."

Important: Some employers offer moving assistance, and you can't "double dip" your reimbursement with your tax break. You can only deduct those expenses not paid for by your employer.

Am I Eligible to Deduct My Moving Expenses?

The reason for this valuable tax deduction is to help people widen their search radius for new jobs by eliminating costs that could prevent someone from finding gainful employment in another city or state. Sometimes, the cost to hire long distance moving companies means that a job seeker can't consider employment if the move is more than a few hundred miles away.

Finding out if you're eligible means taking a look at whether your move will meet the requirements of the government's distance and time tests.

The Distance Test:

The first qualification you'll need to meet is the distance test. You'll need to figure out the commuting distance between your old job and old home and your new job and old home. The difference between these two amounts must exceed 50 miles.

So, let's pretend your current commute to work is 30 miles from your doorstep to the office. The new job you've found must be at least 80 miles away from your present home in order to qualify. There must be a difference of at least 50 miles between your old commute and your new commute when based on the distance to your old home.

It sounds a little confusing, but the calculation should only require a quick visit to a map resource like Google Maps.

Note that this doesn't mean the distance your San Antonio movers transports your belongings. Rather, the distance is based on distances between your jobs and residences.

The Time Test:

In addition to the distance requirement, you must also pass the time test. You must work at your job on a full-time basis for a minimum of 39 weeks in the year following your move. If you secure full-time work, this shouldn't be difficult.

Remember: If you're self-employed, you're still eligible! The government requires that you work a total of 78 weeks during the two years after you move.

What Expenses are Included?

If you satisfy the requirements of the time and distance tests, you'll want to be aware of what expenses you can and cannot deduct. Never assume a particular expense is deductible until a tax professional or official literature from the Internal Revenue Service (IRS) confirms it.

Some of the moving expenses you may deduct include:

  • Packing and Transport: When you hire full-service movers, the costs you may deduct include things like the fees paid to your moving company and the packing materials used to get your possessions on the truck.
  • Disconnecting and Connecting Utilities: It never fails that your cable company will charge you to set up new service in your new home. You might even have to pay a disconnect fee to end your service. These costs are eligible for deduction.
  • Vehicle Mileage: If you use your car to move, you can choose to report the actual cost of gas, or you may use the standard mileage rate as defined by the IRS. The standard mileage rate tends to change every few years, so you'll want to check for the latest rate.
  • Storage costs: If your new home isn't available at the same time you need to begin work at your new job, San Antonio moving companies can place your items in storage until your home is ready. Storage costs, as well as the cost to insure items while they are in storage, are deductible.

Covering All the Expenses of Your San Antonio Move

There are some interesting ways you can maximize the expenses you take off your taxes. In addition to the standard fees from your house movers, as well as the boxes, you can also deduct the costs for other members of your family who might move at a different time.

For example, if you find a job in another city and need to begin work before the kids get out of school for the summer, you can deduct your expenses for your first move, as well as the money spent on professional movers when the rest of your family joins you in your new city.

Special Benefits for Retirees

Another feature of this tax deduction is the special provision for retired workers moving back to the United States after working overseas. For example, if you had a job in Canada and you recently retired, your moving expenses for coming back to the United States are tax deductible.

If you're interested in reading the actual tax code associated with this particular deduction, you'll want to read section 217 of the U.S. Code entitled "Moving Expenses."

What Form Do I Need to Fill Out?

Sometimes, the most confusing part of finding a tax deduction is locating the form you need to submit. You'll want to fill out IRS Form 3903, which is the simply titled "Moving Expenses" document. After filling out the required information, you'll take the number from line five and enter it on the corresponding line on your main 1040 form.

If you have any questions about the moving expenses you can take off your taxes, make sure to make an appointment with a tax specialist. In addition to answering your questions, your accountant may even show you additional expenses you may not have considered.

Erik Scheetz
Erik Scheetz is founder of Texas Best Moving and Storage. Erik has over 15 years of experience in the moving business and has built Texas Best Moving and Storage with pride and integrity in San Antonio, Texas. He is also a Licensed Real Estate Broker with many years of experience. Texas Best Moving and Storage has strived to offer the best customer service and moving experience for every customer on every move.

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