Moving can get pretty expensive. Especially if you are moving long distance, but there are some ways to save money. One of them is to keep track of all your tax-deductible expenses. There are actually quite a few so they can really add up once it’s all said and done.
What Counts as a Tax Deductible Moving Expense
First off, just because you are moving does not mean that you automatically qualify for a tax deduction. In order to qualify, you must be moving because you are relocating for your new employer or because you are moving for a new job. If you are moving because you are pursuing a better career, your new job needs to be over 50 minutes away from where you are moving from, and you need to stay working there for at least 39 weeks within 1-year of your move.
So what exactly is considered to be tax deductible? For starters, if you had to book a flight or had to take a train for your long-distance move, you can get a bit of a tax break. The cost of gas, freeway tolls, and parking fees can be deductible if you drove your own vehicle and any fees that were paid to movers or the cost of a storage unit for up to 30 days. These guidelines can change, so it is a good idea to double check with your accountant, but for now, they are considered to be tax deductible.
Clarity on Deductions
If you are trying to figure out whether or not you can get a tax break on your distance, there are a couple of ways to figure it out. If you hire local movers to help you to move in-town, it won’t be a tax-deductible move.
The IRS doesn’t require you to work a specific number of hours a week, but you do need to work at least 39 weeks out of the year from the move in date. A married couple who is filing jointly needs to have at least one spouse who will meet the time and distance requirements in order to qualify.
Additional Tax Deductible Moving Expenses
Other expenses that are considered to be tax deductible include packing supplies, any fees charged by your moving company, costs associated with connecting and disconnecting utilities, lodging during travel, and the cost of insurance for your belongings.
When to Claim Your Moving Expenses for a Tax Deduction
You will want to submit the 3903 form with your tax return. Keep in mind that you won’t know if you are even eligible for any tax deductions for at least 12 months after you have moved and if you end up not being eligible for a deduction you will be required to reverse it on your next tax return. You can also amend the original in order to recalculate what you owed in taxes minus the deduction.