This year’s tax season is behind us, whew, but that doesn’t mean it’s time to stop thinking about ways to shave of dollars from your 2010 tax bill come April 2011.
Did you know that your moving expenses may be tax deductible? If you find yourself having to move for work, you may be able to write off your relocation costs. It doesn’t matter if you’re moving for your first job, starting a new job or relocating for your current job. You just need to satisfy a few requirements set by the IRS.
The move must be 50 miles. To be precise, the location of your new job must be 50 miles further from your current home than your old job. For example, if you currently commute 20 miles, your new job must be at least 70 miles away from you current home by the shortest route.
The move must meet some time requirements. It must take place within one year of starting your new job. There is an additional requirement that you must work full-time at a new job for 39 weeks within the year after you start.
If you meet these requirements, you may be wondering what you can deduct.
Begin with the costs incurred by moving your personal possessions and household goods. You may be able to deduct money you spend storing items as part of your move. Fees for connecting or disconnecting utilities may be deductible too as may be the cost of travel and lodging during your move.
Just remember, if you’re lucky enough to be reimbursed for your moving expenses by your new employer (perhaps a lump sum relocation fee), then don’t expect to also deduct your moving expenses from your taxes. You can only deduct the money you spend beyond what your company’s pays for. For complete details on deductible moving expenses, see IRS publication 521 and of course consult your tax advisor.
CHBO does not give tax or legal advice. All tax information is for discussion purposes and should be thoughtfully discussed and confirmed with a certified tax authority in your area.