written by Eric Lampe
Moving expenses may have the ability to be tax deductible by individuals. There are three key criteria’s that must be satisfied: the move must closely-related to the start of work; a distance test must be satisfied and a time test also must be met.
Closely-related to the start of work
The move must be closely-related to the start of work at your new employers. The IRS has explained that closely-related in time generally means an individual can consider moving expenses incurred within one year from the date he or she first reported to work at the new location as closely related in time to the start of work.
Distance
An individual’s move satisfies the distance test if their new employer is at least 50 miles farther from his or her former home than the old main job location was from the former home. An individual’s main job location is the location where he or she spends most of his or her working hours.
Time
An individual who is a wage earner (employed by another) must work full-time for at least 39 weeks during the first 12 months immediately following his or her arrival in the general area of the new job location. Self-employed individuals must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months immediately following their arrival in the general area of the new work location.
As always, moving for personal reason is not considered a tax deductible moving expense and therefore should not be taken on a tax return.
Below is a chart that should walk you through the steps to determine if your moving expenses are tax deductible. If you have any questions regarding moving expenses, please contact us at 417-881-0145.
