Deducting The Cost of Moving To A New Job

The days of spending 30 years in one town at one job seem to be a thing of the past. Even huge companies like General Motors are being forced to redefine themselves. This redefining often comes in the form of letting employees go. As this occurs throughout our economy, people find themselves moving numerous times to new take new employment positions.

I will not beat around the bush on this one. I HATE moving. Really bad. I am sure you feel the same way. There is, however, one small silver lining to the grueling, miserable process. Yep, you can deduct the expenses you incur in getting your stuff from here to there.

In a shocking twist given the nature of the tax code, the test to determine if your moving costs are deductible is fairly simple. Well, for the tax code it is. The test says that you can claim deductions if the distance from your old home to your new place of employment is more than 50 miles than the distance from your old home to your old place of employment. Only in America could we make such a simple issue so complex. You can run the calculation yourself, but an easier guideline is just to figure out if your new job is more than 101 miles away. Why the IRS refuses to take the simple approach is anyone's guess.

Alas, the IRS is paranoid about cheaters, which means there are a few other rules as well. First, you cannot deduct any expenses that your new employer reimburses you for. Seems fair enough. You also must actually work in the area you move to for at least 39 weeks of the one year period after you get there. You do not have to work at the same job or for the same company the entire time. For professional loafers, this gives you 13 weeks to sit on your duff and enjoy the new environment without working.

If you are self-employed, the moving test is a bit tougher. The distance test is the same, but you must work in the new area for 78 weeks out of the two years immediately following your move. Yes, you must live there for two years to get the deduction. Just more proof that the IRS hates you.

Moving is a nightmare. If you meet the handy, dandy tests of the IRS, at least you can deduct some of the cost.