When one thinks of moving, it is usually to cringe. After getting your taxes done, it comes in close to going to the dentist on least favorable things to do. That being said, it is more and more of a necessity these days.
It used to be that you could take a job with a company and count on staying there for thirty or forty years. Those days are long gone as we all know. From downsizing to salary concerns, we all move because of employment reasons.
This change in society has not gone unnoticed by the government. In a shocking move, the powers that be have actually created tax dedutions for people who incur expenses moving to a new job. Well, at least most of them.
Since we are talking taxes, nothing can be straightforward. Yep, you have to pass a few tests before claiming moving deductions. First up, your new job must be 50 miles more from your first home than your new place of employment. Confused?
Let's look at an example. Assume I work a my horrible job which is 9 miles from my home. I take my new wonderful job which is located 109 miles from my home and I have to move. Since the difference is 100 miles, I can claim moving deductions.
One test is never enough with the IRS. There is another test that requires you to work roughly ten months out of the twelve full time after the move before you can claim the deduction. The exact requirement is thirty-nine weeks in the 12 months.
If you are self-employed, there is another time test. You have to meet the 39 week test above. You also must work a total of 78 weeks in the first 24 months after moving. You can take these deductions ahead of time if you expect to complete them.
There will be a natural temptation to claim moving deductions, particularly if you are close to passing the tests. Don't. The IRS closely watches how taxpayers claim new tax deductions, so you don't want to get audited.
Given all this work, are the moving deductions worth it? Well, they can be. It depends on what you incur as costs. You can deduct all reasonable expenses such as truck rentals and travel costs from your old home to the new one.
