Did you know that you can deduct for moving expenses? Well now you do! In order for a move to be tax deductible, your move must meet certain conditions. According to the IRS Website:
“If you moved due to a change in your job or business location, or because you started a new job or business, you may be able to deduct your reasonable moving expenses but not any expenses for meals. You can deduct your moving expenses if you meet all three of the following requirements:
- Your move closely relates to the start of work
- You meet the distance test
- You meet the time test
Your move must closely relate both in time and in place to the start of work at your new location. You can consider moving expenses incurred within one year from the date you first reported to work at the new location as closely related in time to the start of work. A move generally relates closely in place if the distance from your new home to the new job location is not more than the distance from your former home to the new job location. For exceptions to these requirements, see Publication 521, Moving Expenses.
The distance test: Your new workplace must be at least 50 miles farther from your old home than your old job location was from your old home. If you had no previous workplace, your new job location must be at least 50 miles from your old home.
The time test: If you are an employee, you must work full-time for at least 39 weeks during the first 12 months immediately following your arrival in the general area of your new job location. If you are self-employed, you 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 your arrival in the general area of your new work location. There are exceptions to the time test in case of death, disability and involuntary separation, among other things.
If you are a member of the Armed Forces and your move was due to a military order and permanent change of station, you do not have to satisfy the distance or time tests.
Figure moving expenses on Form 3903 (PDF), Moving Expenses, and deduct as an adjustment to income on Form 1040 (PDF), U.S. Individual Income Tax Return. You cannot deduct any moving expenses covered by reimbursements from your employer that are excluded from your income.
For more information on deductible and nondeductible moving expenses, refer to Publication 521, Moving Expenses. Also, refer to Publication 521 for information on moves between locations in and outside the United States.
The IRS details the types of moving expenses that you can deduct for in Publication 521:
Household goods and personal effects. You can deduct the cost of packing, crating, and transporting your household goods and personal effects and those of the members of your household from your former home to your new home. For purposes of moving expenses, the term “personal effects” includes, but is not limited to, movable personal property that the taxpayer owns and frequently uses.
If you use your own car to move your things, see Travel by car, earlier.
You can deduct any costs of connecting or disconnecting utilities required because you are moving your household goods, appliances, or personal effects.
You can deduct the cost of shipping your car and your household pets to your new home.
You can deduct the cost of moving your household goods and personal effects from a place other than your former home. Your deduction is limited to the amount it would have cost to move them from your former home.
Paul Brown has been living and working in North Carolina for the last 4 years. Because he has been renting a small apartment, he stored some furniture at his parents’ home in Georgia. Paul got a job in Washington, DC. It cost him $900 to move the furniture from his North Carolina apartment to Washington and $3,000 to move the stored furniture from Georgia to Washington. It would have cost $1,800 to ship the stored furniture from North Carolina to Washington. He can deduct only $1,800 of the $3,000 he paid. The amount he can deduct for moving his furniture is $2,700 ($900 + $1,800).
You cannot deduct the cost of moving furniture you buy on the way to your new home.
Storage expenses. You can include the cost of storing and insuring household goods and personal effects within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home.
Travel expenses. You can deduct the cost of transportation and lodging for yourself and members of your household while traveling from your former home to your new home. This includes expenses for the day you arrive.
The day of arrival is the day you secure lodging at the new place of residence, even if the lodging is on a temporary basis.
You can include any lodging expenses you had in the area of your former home within one day after you could no longer live in your former home because your furniture had been moved.
The members of your household do not have to travel together or at the same time. However, you can only deduct expenses for one trip per person. If you use your own car, see Travel by car, earlier.
Example. In February 2015, Josh and Robyn Black moved from Minneapolis to Washington, DC, where Josh was starting a new job. Josh drove the family car to Washington, DC, a trip of 1,100 miles. His expenses were $253 for mileage (1,100 miles x 23 cents per mile) plus $40 for tolls and $150 for lodging, for a total of $443. One week later, Robyn flew from Minneapolis to Washington, DC. Her only expense was her $400 plane ticket. The Blacks’ deduction is $843 (Josh’s $443 + Robyn’s $400).
Well, there you go. I hope this information helps you as you consider hiring professional movers. Look forward to hearing from you soon!