Can I Deduct Moving Expenses?

Moving expenses may be deductible on your tax return. In order for moving expenses to be deductible on your tax return, you must meet the following requirements.

1. Your move is closely related to the start of work. This would be in regards to both time and place. Generally, moving expenses incurred within one year from the date you started the new job would count. Closely related in place means that your new home to your new job is not more than your old home from your new job.

2. You meet the distance test. The new job must be at least 50 miles farther from your old home/job.

3. You meet the time test. For employees, you must work full-time for at least 39 weeks during the first 12 months from your arrival in the new location. For self-employed individuals, you must work full-time for at least 39 weeks during the first 12 months of arrival and for a total of at least 78 weeks during the first 24 months of arrival.

If you are in the armed forces and your move was due to a military order, you do not have to satisfy the "distance or time tests".

One other thing to note, reasonable moving expenses would qualify. Examples are transportation costs of your belongings, potential storage costs of your belongings, and travel such as lodging. Meals would not be included.

Keep in mind, if you were reimbursed by your employer, you cannot take the portion that you were reimbursed as an expense unless the employer included these reimbursements in income.

For those of you who like to get technical, these expenses are calculated on Form 3903 and then would show up on your tax return as an adjustment on line 26 of Form 1040. As always, if you have specific questions regarding the deductibility of your moving expenses, please contact us, you Wilmington, NC CPA firm.