Are My Moving Expenses Tax Deductible?

Did you know that in many cases your moving expenses can be tax deductible? If you have moved due to a change in your job or business location, or because you started a new job or business, you may be able to deduct a portion of your moving expenses on your federal income tax.

According to the IRS, there are three tests that you must satisfy for this deduction.  First, is the “distance test”.  Your new job must be at least 50 miles farther from your former home than your old main job location was from your former home.  If you had no previous workplace, your new job must be at least 50 miles from your old home.

The second test is a “time test”.  If you are an employee, you must work full-time for at least 39 weeks during the first 12 months right after you arrive in the general area of your new job location.  If you are self-employed, you must work full-time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you arrive in the general area of your new job location.

The third requirement of the IRS is the “closely related to the start of work test”.  You can generally consider moving expenses incurred within one year from the date you first reported to work at the new location .  You do not have to arrange to work before moving to a new location as long as you actually go to work in that location.

According to the IRS, reasonable moving expenses include:

  • The cost of packing and transporting your household goods.
  • The cost of storage and insurance on these items.
  • Charges for connecting and disconnecting utilities while moving your household goods.
  • Lodging and transportation (fuel, oil, parking fees and tolls) while traveling from your old home to your new home.

IRS does not allow meals as a deductible expense.  Pre-move house-hunting expenses, return trips to your former residence, and entering into or breaking a lease are also not deductible.  And most importantly, you cannot deduct any moving expenses that are reimbursed by your employer.