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How to Use Moving Expenses When Filing Taxes

moving expenses

While it is just February, April 15th will be here before you know it. You should start thinking about getting all your documents to file your yearly taxes. Did you know that you might be able to deduct some or all of your moving expenses? MyBekins strives always to save our customers the most money. Part of saving money is having the right information and resources at your disposal. While we aren’t accountants, we certainly know the ins and outs of moving and their associated expenses. Here are some ways you can use moving expenses when filing taxes.

Can You Deduct Moving Expenses?

Some individuals or businesses can deduct moving expenses if you fit the right criteria. The IRS has listed the following instances in which you can deduct moving expenses from your yearly taxes:

  • If your move is related to the start of your work
  • You meet the distance test
  • You meet the time test

The purpose of your move must be tied to the time and place of the location of your new job. If you believe it is, you need to meet the two tests to deduct your moving expenses.

Do You Meet the Distance Test?

To meet the distance test, you have to have moved for your job. We don’t mean just moving locally, but a move of at least 50 miles farther from your former home to your new job location. For example, if your old home was five miles from work, your new job location must be 55 miles from your old home to qualify. Please note, there are some exceptions to the distance test that may qualify you despite not meeting the distance test. There are special rules for the Armed Forces and Union members.

Do You Meet the Time Test?

The time test is a bit more complicated than the distance test. The time test will depend on whether you are an employee or self-employed. For employees, you must work full-time (at least 39 weeks during the first year after you arrive) to qualify. For self-employed persons, you have to work at least 39 weeks during the first year and at least 78 weeks during the first two years. This is a very basic explanation of the time test. If you would like a full technical explanation of the time test, see the official IRS website.

What Can You Deduct?

If you qualify to deduct moving expenses, you can deduct all expenses that are reasonable for your move. This seems pretty broad, and it is, but you have to use common sense. Some common deductions include:

If you have a question about what you can and cannot deduct on your moving expenses, you need to contact your CPA. If you would like professional assistance with all other aspects of your move, call myBekins!

Give us a call at [phone] to schedule your move with myBekins today. We are happy to assist you with both local and long-distance moving services!

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