Recently the question “Are my moving expenses deductible?” was asked of me and since the summer and fall is when the majority of relocations occur, I wanted to share when you are allowed to deduct expenses and what can be deducted.
If the following applies, then you will want to track your moving expenses in order to allow your tax preparer to deduct those expenses on your return.
- The move is related to either a new job or a change in your current job.
- The new job location is at least 50 miles farther from your old home than your old job was.
- You are an employee receiving a W-2 from the company you are working for.
- You will be working full time as an employee for at least 39 weeks in the first 12 months after the move.
If all of the above are true then you are allowed to deduct moving expenses on your tax return.
So, what are you allowed to deduct? The following are the expenses you will want to track as part of your moving expenses. I would recommend tracking each separately to eliminate questions from your tax preparer.
- The cost of moving household goods and personal effects (including in-transit or foreign-move storage expense).
- Travel expenses (including lodging but not meals) for one trip by the taxpayer and each member of the household. Household members do not have to travel together or at the same time.
- If you are using your personal vehicle to move yourself you can track those expenses one of two ways. You can take the standard mileage rate for 2015 of 23 cents per mile or you can track the out of pocket expenses for fuel and oil.
- Storage expenses which include storing and insuring household goods for up to 30 days after the day goods are moved from the former home and before they are delivered to the new home.
Items that you are NOT allowed to deduct for tax purposes are expenses of buying or selling a home, meal expenses, pre-move house hunting expenses, lease termination payments, and temporary living expenses.
In some cases you may be fortunate enough that your employer will reimburse you for your moving expenses. If that is the case the amount will be reported on your W-2 and any expenses that are reimbursed will also need to be given to your tax preparer. If the company reimburses items that are not tax deductible that is considered additional income.
There’s a lot to think about with moving, here’s are some handy checklists from Real Simple and HGTV. If you are moving, I wish you the best.
The Wassman CPA Services website and blog is meant to offer general information to our readers. The information provided is not intended to replace or serve as a substitute for any accounting, tax or other professional advice, consultation or service. You should contact Wassman CPA Services for advice concerning specific matters prior to making any decisions.
