t’s not unusual to pull up stakes after you land a new job. If your new employer does not reimburse you for your moving expenses, you may still be able to deduct them on your tax return. To qualify, your move must be due to starting a new job, undergoing a change in your job or moving the business to a new location. Conversely, if the move is for personal reasons — for example, you’re upsizing to accommodate a newborn or downsizing in retirement — you can’t claim a moving expense deduction.
To deduct your moving expenses you must meet two separate requirements concerning distance and time.
- Distance: Your new job location must be at least 50 miles farther from your old home than your old job location was from your previous home. The IRS relies on the shortest of the most commonly traveled routes to measure the distance between locations.
- Time: If you’re an employee, you must work full-time for at least 39 weeks during the first 12 months after you arrive in the general area of the new job. But you don’t have to work for the same employer as long as you meet the 39-week requirement. However, if you’re self-employed, you must also work full-time for a total of at least 78 weeks during the first 24 months after you arrive in the general area.
Assuming you meet both requirements, you’re entitled to write off the reasonable costs of moving household goods and personal effects as well as your travel expenses — including lodging, but not meals — between the two locations. Normally, this includes charges paid for a moving company or truck rentals. If you go by car, you can use the IRS-approved flat rate of 19 cents per mile on your 2016 return (decreasing to 17 cents per mile in 2017), plus tolls and parking fees. Alternatively, you can substantiate your actual expenses.
Moving is never easy, but deducting moving expenses relieves some of the financial burden. If you have specific questions about your job-related move, contact Dye & Whitcomb, Fort Collins CPA’s today!