Moving taxes or the moving expenses tax deduction that is allowed by the IRS can help you to save money. If you meet the requirements specified by the IRS, you can claim a relocation income tax allowance on reasonable expenses incurred in moving your household goods and personal effects to your new home.
You can also claim an IRS relocation deduction on the expenses incurred on traveling to your new home, including your lodging expenses, but you cannot, deduct expenses on meals.
The IRS allows a moving expense tax deduction if your relocation is closely related to the start of work. Apart from this, your move must also meet the distance and time requirements, unless you are a member of the Armed Forces and are relocating due to a permanent change of station.
To meet the distance requirement, your new main job location must be at least 50 miles farther from your previous home than your old main job location was.
Alternately, you must show that living in the new home is a condition of employment, or that you will spend less time or money commuting from the new home to the new place of work. The shortest distance, or the most frequently traveled route is used for this.
To qualify for a relocation income tax deduction, if you are employed, you must work full-time for at least 39 weeks, during the 12 months right after you relocate.
To qualify for a moving expenses taxes deduction, 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 after you relocate. There are exceptions to this rule, in the case of death, disability and involuntary separation.
Usually moving expenses incurred within one year from the date when you reported for work at the new location qualify for an IRS moving expense tax deduction.
Retirees who have worked outside the United States or the survivors of people who have worked outside the United States can claim a moving tax deduction on expenses incurred to move back to the United States.
If you need any additional information or advice about IRS moving expenses tax deductions, please feel free to send us and e-mail.