No matter how you look at it, moving is expensive. If you’re moving someplace for a job, or even just to look for a job, though, the IRS might be able to help. Under some circumstances, moves can be tax deductible. Before you get too excited, know that most moves are not tax deductible.
How do you know if your move is tax deductible?
First the bad news. Not a lot of moves are tax deductible. But if you moving for work, it might be. According to the IRS, your move qualifies for a tax deduction if it meets the following criteria:
Distance test
If you are currently employed and you are doing the commute from hell, you can deduct your moving bill if you are moving 50 miles closer to your job. For example, if you commute from Berkeley to San Jose, about 60 miles, your move might qualify if you move within 10 miles of work.
Time test
The IRS mandates that you must work full-time for at least 39 weeks during the first year at your new home. The 39 weeks don’t have to be consecutive and they can be with separate employers. So if your initial job isn’t your dream, or if it’s a contract, it’s still okay, as long as you find another job.
What is deductible?
The IRS is fairly generous in what they allow as moving expenses. You can deduct the cost of the mover, as long as it’s reasonable. Deduct your travel costs. Deduct the cost of up to 30 days of storage.
The best part of all
With the one year work requirement, you’d think you wouldn’t be able to deduct your move until the following year. But that’s not entirely true. With IRS form 3903, you can deduct the move and if it doesn’t workout, you’ll have to pay it back the next year.
Conclusion
As you can see, not all moves are tax deductible. If you are moving into a bigger home, that’s still within about the same distance from work, it’s on you. If you are moving for retirement, or close to family, or just because you found a cool place to live, probably not. However, if you find a job that’s a good distance from your old place, contact your tax professional.
Image CC 2.0, by Investment Zen, via Flickr
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