Moving This Summer?

Summer usually is a popular time for people to move. 

We are moving!

It is especially true for families with school children.   If you are planning to move because of starting a new job or even the same job at a new job location, there are 10 tax tips on expenses that you may be able to deduct on your tax return.

1. Expenses must be within the year you start work: Generally, your moving expenses needs to be incurred within one year of the date you first report to work at a new job location.

2. Distance Test: Your move need to meet the distance test.  Your new job location needs to be at least 50 miles farther from your former home than your previous job location was from your former home.  For example, if your old job location was three miles from your former home, then your new job location must be at least 53 miles from that former home.

3. Time Test:  Upon arriving in your new job location, you must work full time for at least 39 weeks during the first year on your new job.  Self-employed individuals must also work full time for a total of at least 78 weeks during the first two years on the new job. If your tax return is due before you have satisfied this requirement, you can still deduct your allowable moving expenses on your tax return if you expect to meet the time test. There are some special rules and exceptions, see Publication 521, Moving Expenses for more information.

4. Travel Expenses:  You can only deduct lodging expenses (but not meals) for yourself and family members while moving from your former home to your new home. You can also deduct one trip per person transportation expenses which generally include airfare, vehicle mileage, parking fees and tolls.

5. Household Goods:  You can deduct the cost of packing, crating and transporting your household goods and personal property, including the cost of shipping household pets. You may also be able to include the cost of storing and insuring these items while in transit.

6. Utilities Expenses:  You can deduct the costs of connecting or disconnecting utilities.

7. Nondeductible Expenses: You cannot deduct any part of the purchase price of your new home, car tags, a drivers license renewal fee, costs of buying or selling a home, expenses of entering into or breaking a lease, or security deposits and storage charges as moving expenses, except those incurred in transit and for foreign moves.  In other words, you can deduct only those expenses that are reasonable for the circumstances of your move.

8. Form To Use: To figure the amount of your deduction for moving expenses, use Form 3903, Moving Expenses.

9. Reimbursed Expenses:  If your employer reimburses you for the expenses of your moving for which you took a deduction, you will have to include the reimbursement as income on your tax return.

10. Update Your Address:  When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you will receive your mails in the new location.  Use Form 8822, Change of Address, to notify the IRS.

If you have any questions, please feel free to email us. 

Your comments and feedback are welcome.
Source:  www.irs.gov.
Email:   Excellent-tax@gmx.com