How To Qualify For Tax Deductible Moving Expenses

Are You Qualified for Getting a Tax Deduction for Moving Expenses?

Although we might be comfortable in our current location, sometimes, we need to make a huge leap. We may need to move to a new place to get the job that we’ve always wanted, for a better income and a better future.

tax deduction for moving expenses

Work-Related Location Move By An Employee

Employees who relocate to another place due to a new-found job may find it difficult, especially if there are moving expenses that need to be considered.

Fortunately, you can claim for a reimbursement if you move due to a job relocation.

Tax-deductible moving expenses include the cost of gas, parking fees, and tolls, and your temporary lodging as you move to your new place. Hiring a moving company to help you transport your belongings to the new residence may also be included in the tax deductions.

The first thing to consider is the time and place of your move must be close to the schedule when you start your new job. Second, the distance between your new workplace and your old residence must be more than 50 miles.

To qualify for a tax deduction for moving expenses, there are circumstances which you need to meet. These factors include the work-related test, distance test, and the time test. Find out more of each below to learn how to deduct your expenses due to relocation for a new job.


Tax Deduction For Moving Expenses

  1. Work-related test: To deduct your tax due to relocation for a new job, the time and place of your move must be closely related to the location of your new job.
  2. Distance test: There are also rules as to the distance of your move to be qualified for a tax deduction. First, the distance between your new work location and your old residence has to be at least 50 miles farther than the distance between the location of your old job and your old residence. Consequently, the distance of your commute to the new job location must increase by 50 miles from your old residence.
  3. Time test: There are also time test requirements that you need to comply with to qualify for a moving expense tax deduction. During your first 12 months starting from the day that you have moved to your new place, you must render a full-time employment of at least 39 weeks. The 39 weeks of working full-time don’t have to be consecutive. The Internal Revenue Service or IRS also doesn’t require a specific number of days or hours that you need to render to count a week of work; it depends on the company standards of your employer.

deduct your tax due to relocation for a new job

Deduct Your Tax Due To Relocation For A New Job

A work-related relocation move by an employee is a tough decision and needs to be planned well. If you are relocating, make you’re moving less expensive. Be sure that you qualify for moving expense tax deductions and claim for a reimbursement by deducting them from your income tax.