No one enjoys the process of moving, but we all have to do it at one time or another. Did you know that if you’re moving, or have already moved within one year of starting a new job, you may be able to claim moving expenses on your tax return?
Even if you didn’t have a job lined up beforemoving, or you didn’t start a job right away after moving, you may be able to claim moving expenses. Take a look and see if you qualify for the sometimes overlooked tax deductible moving expenses.
Not everyone will qualify for this type of tax deduction, but the Internal Revenue Service has two basic rules. One is what it calls the “distance test,” which is a requirement thatthe new home is located at least 50 miles further than your prior work location was from your old home. If you did not have a workplace, or if you worked from home before the move, then the new job must be at least 50 miles from your old home. While this may sound a little confusing, IRS form 3903 has a simple worksheet that will help you figure this out.
The second IRS requirement is the “time test,” which states that you must have had 39 weeks of full-time employment in the 12 months following the move. This is where things can get a little complicated, as a move late in the year wouldn’t leave enough time to have passed to meet the requirement before the tax year is over, and the deduction can’t be taken the following year.
However, the IRS will allow you to take the deduction if you expect to work at least 39 weeks at full-time status following the move. If the year passes and you don’t meet the requirement, you can amend your tax returnby filing Form 1040X, Amended U.S. Individual Income Tax Return. More simply, you could also report the amount deducted as income on the next year’s tax return as “other” income.