Moving Expenses for Tax Deductions

If you moved because for a job in 2015 or moved your business last year, you can deduct moving expenses from your taxes, according to the IRS. Moving is a major life event, and as with just about any major life event, there are tax consequences. In this case, many of them can be in your favor.

The IRS’ Two Tests

There are two tests to determine whether moving expenses are tax deductible:

Test No. 1

The first is the “distance test.” Your new main job location must be at least 50 miles farther from your former home than your old main job location was from that former home. If you were not filing your taxes after a movepreviously employed outside of your home, your new work location must be at least 50 miles from your old home. For example, if you live in Atlanta, moving to Macon, Georgia, for a job would allow you to meet the distance test. If you live in Savannah, moving to Richmond Hill, Georgia, because your office moved would not meet the distance test.

Test No. 2

The second is the “time test.” That means that you must work full-time for at least 39 weeks during the first 12 months after your arrival in the general area of your new job. 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 new location.

There are some exceptions to these requirements. For example, service members who receive orders to move do not have to meet these tests. Detailed information on moving expense deductions for 2012 can be found in IRS Publication 521.

Deductible and Nondeductible Expenses

If you meet the time and distance tests, transportation, moving and storage expenses can be deducted. That means that you may be able to deduct the services of our Atlanta movers as well as our Atlanta storage solutions. Any reimbursements from your employer obviously need to be subtracted from the deductions you take. This is done using IRS Form 3903. There are different types of reimbursements, so you will need to determine which kind you received.

While some of the larger moving expenses are deductible if you qualify, not everything will be. For example, you cannot deduct anything related to getting a new driver’s license and license plates if you move to another state. You also cannot deduct the cost of any home improvements related to either of your homes as moving expenses. Consult a tax professional to determine what, if any, tax deductions you can take from buying and/or selling a home.

It is important to note that you cannot deduct the same items as moving expenses and business expenses. You must decide which category you are going to use for each. Again, it is advisable to consult a tax professional to make sure that you take all of your deductions, and are not writing off non-deductible expenses.

It’s important to do your tax research, as well as your moving research! We can recommend a great Atlanta-based moving company to ease your transition!

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