Moving Tips

IRS Moving Deductions: How Can They Help You?

Written by MoveEasy

If you are planning a move, you might also be able to plan for a tax deduction.

Most people don’t know, but if you meet a certain set of qualifications during your move, these deductions can really help you out.

As laid out by the IRS, there are three specific requirements to meet in order to deduct moving expenses from your taxes, including that your move must:

  • Be closely related to the start of work
  • Meet the distance test
  • Meet the time test

Start of work

You can usually consider moving expenses within one year from the date you first started work in your new location as closely related in time to your start of work. As long as you are actually going to work in that location, you don’t absolutely have to arrange to have the job set up before the move.

Distance test

If your move is work-related, your new job location must be at lease 50 miles farther from your old residence than your previous job was. If you are getting a job for the first time, your new job location must be more than 50 miles away from your former permanent residence. However, depending on your job this may change. If you are a union worker or a member of the military, make sure to read the IRS website carefully and figure out where you are in the exceptions list.

In addition, if you have multiple jobs, it depends on the amount of work you do and the amount of money you earn at each place.

Time test

In order to qualify for tax deductible moving expenses, you must also meet one of the two times tests. The first is the time test for employees, and the second is the test for self-employed individuals. During the first 12 months upon arriving in the general area, employees must work 39 weeks. Self-employed individuals must work 39 weeks in the first 12 months, and also work 78 weeks’ total in the first 24 months. However, there are several different parameters that apply to both classes which can be reviewed further on the IRS website as well.

 

For each of the tests above, there is a list of exceptions. You should definitely do your research with the guidelines if you are or were a member of the military, a union worker, or just aren’t quite grasping the mileage/timeframe rules.

 

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