Tax Issues and Moving

Posted By: Dr. Frugal in Taxes on 08/05/2007 at 11:13:39

You may be able to deduct some of the expenses of moving from your taxable income, even if you don't itemize expenses. There are two rules you must satisfy: the distance test requires the new job to be located at least fifty miles from your old residence. The time test requires you to work full-time in the new location (not necessarily at the same job the whole time) for at least thirty-nine weeks in the twelve months following your move.

If you're a new college graduate taking your first full-time job, the work location must be at least fifty miles from your former legal residence, which is the address you use when you file your income taxes, not your school address, so it's probably your parents' home. If you return home after college, you won't qualify for this deduction. If you're married, either you or your spouse can qualify, but you can't add your work times together to pass the thirty-nine week test.

If you meet both of the tests, you can deduct the costs associated with physically moving your belongings from your former legal residence to your new home. This includes the amount paid to a moving company or the cost of a truck rental if you do it yourself. If you use your own car, you can deduct actual expenses for gas and oil or mileage at twelve cents a mile. Keep a mileage log and save it with your tax papers for the year. You can also deduct airfare, train, bus and lodging expenses (but not meals) while en route for you and any dependents that you take with you. Keep all your receipts.

If your former home was twenty miles from your job location, your new job location must be at least seventy miles (fifty plus twenty) from your old home in order to meet the distance test for deducting moving expenses from your income.

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