July 15, 2016
Moving can get expensive, so it’s nice to know that it could be tax deductible. Although we are not accountants – we can offer you two tests to determine if your moving expenses may be eligible. You must qualify for both tests in order to qualify for a tax deduction.
Test 1: “The Distance Test”
If your new job is at least 50 miles further from your old home than your old job location was to your old home – you qualify. So, for instance, if you used to drive 30 miles to work from your old home – then distance from your new job must be at least 80 miles from your old home to qualify in this category.
Test 2: “The Time Test”
If you’re an employee, you must work for at least 39 weeks during the first 12 months after you move to your new home. If you’re self-employed, you must comply with the above – plus, work full-time for a total of at least 78 weeks during the first 24 months, after you arrive in your new work location.
There are some exceptions to not meeting “The Time Test” – for instance if death, disability or involuntary separation occurs, you should talk to your accountant to see if you may be exempt from meeting the time rules. Also, if you’re a member of the armed forces and your move was made because of a permanent change of station location, you do not have to satisfy the distance or time test.
Again, if you have specific questions – please call your CPA and they will help you navigate through your tax deduction.