Can you deduct moving costs from your taxes?

This article is going to be about moving costs and whether you can deduct them for tax purposes. First thing to remember is that we’re talking about moving expenses related to moving your personal items, such as home furniture and clothing, not business assets which would be a business expense and deductible from your business tax return. 

If you want to deduct personal moving expenses, first you have to meet the following three requirements: Number one, you can only deduct personal moving expenses if you started a new job within one year of the move. For example, let’s say you’re planning to move from Chicago to Denver, as long as you find a job within one year of the move, then those moving expenses may be tax deductible. Number two is the distance test. Make sure your new job location is 50 miles further than the distance between your old home and your old job. Keep in mind it’s 50 miles further, if your new job takes you to a different state or across the country most likely you’re gonna meet the distance test, but if your new job is just in a different part of the city or in the same County, most likely the distance tests won’t be met. Three is if you’re an employee, you must have worked 39 weeks within the first 12 months of the move. For self-employed, you must have worked 78 weeks in total out of the first 24 months from the move. So if you’re an employee, 39 weeks within a 12-month period of the move. If you’re self-employed 78 weeks within 24 months or 2 years of the move. 

What are deductible moving expenses? Those are expenses directly related to the transport or storage of your personal item. Common moving expenses include things like packing supplies, moving company expenses, transportation of your car or your household pet, also fees related to disconnecting utilities, all common qualified moving expenses. Also remember that travel costs including lodging but not meals, are included as a deductible moving expense. It is important to note that the expenses need to be reasonable and not extravagant. What if you used your car for the move? If you use your car for the move, then you can use one of two methods to take the tax deduction: The first is the actual method where you can deduct things like gas, and number two is the mileage method, where you can take 19 cents per mile that you drove for the move, remember it’s either or not both. 

Where do you report your personal moving expenses? You will report your moving expenses on the form 3903. When you file your personal income tax return, remember you cannot deduct any moving expenses that were reimbursed by your employer that were not included in your income.