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Moving can be expensive. Recent surveys have shown that long-distance moves can cost anywhere between $9,000 and $12,000! Thankfully, Uncle Sam has got your back when it comes to reducing the cost of your move.
Basic Eligibility Requirements
While you can deduct the majority of the expenses related to your move, you’ll need to meet certain eligibility requirements. These are detailed in IRS Publication 521 (Moving Expenses).
Most of that can be rather confusing, as is most of the communication that originates from the IRS.
Example of a Move That Qualifies for Tax Deductions
If your current employer is 35 miles from your home, you’ll need to move at least 85 miles away to be eligible for tax deductions. That’s because you have to move at least 50 miles farther than the distance from your old home to your old job.
Example of a Move That Doesn’t Qualify for Tax Deductions
If you’re currently driving 35 miles to work, and your employer moves his office location to 85 miles in the opposite direction, you won’t be eligible for tax deductions if you move. That’s because the total increase in distance traveled is only 50 miles – and you’ll need to move at least 50 miles plus the original distance to your office to qualify for the move.
What Can You Deduct?
You can deduct virtually everything associated with your move with few limitations. Deductible items include:
Further Considerations for a Tax-Deductible Move
If you’re married and filing jointly, only one spouse must meet the time and distance requirements to deduct your moving expenses. If your employer is kind enough to provide even a partial reimbursement for the moving expenses, you can’t double dip – you’ll only be able to claim expenses that came out of your own pocket.
Finally, if you deduct your moving expenses but then fail to meet the time requirements, you’ll need to amend your future tax returns.
The best way to ensure that your moving expenses are properly deducted is by working with an accountant, who will be able to maximize your deductions and save you a ton of money.