Can you deduct moving expenses on your tax return?
Did you recently move to a new job? What kind of home improvements are tax deductible? Can you deduct all or part of moving expenses on your tax returns? What /which moving expenses are fully tax deductible? Are home improvement expenses considered tax deductible?
If you are trying to get answers to all these questions, here is a quick summary that will make your search easy :
You may be eligible for moving expense deduction if you changed locations or moved into a new home. New home refers to the main home and not a vacation or seasonal home.
Eligible expenses may be claimed as a tax deduction if they pass three tests :
1) The move must closely correlate to the start date of the new work: In most cases, if the start date is within one year of the move date, it can be included as a moving expense.
2) Time test: After the move, you should have worked full time for a minimum of 39 weeks during the first year. For self-employed, it is 78 weeks during the first two years of the job site.
3) Distance test: The new job location must be at least 50 miles away from your former home. As an example: If your old job was five miles from your home location, a new job should be at least 55 miles away from your old home.
There are few other key points to claim this deduction :
1) Recordkeeping: Ensure you have receipts, bills from movers, mileage logs credit card statements etc.
2) Reimbursed expenses: If the expenses are reimbursed by the employer, that payment is required to be included as income. Any unreimbursed expenses can be claimed under moving expenses on your tax return.
3)Nondeductible expenses: Certain expenses are considered nondeductible including the cost of meals during the move, selling costs of the home, the cost of breaking a lease, drivers license costs.
IRS form 3903 moving expenses need to be completed to claim this deduction. Details on moving expenses can be found in IRS publication 521, moving expenses.
Is moving expenses considered an itemized deduction?
No, it is not required to itemize your tax deductions to claim moving expenses. Moving expenses are considered as an adjustment to income. They are not itemized deduction.
Additional IRS resources