Earlier in the week, I posted a new entry on the RDTC Tax Help Blog deduction of the week series. The new article explains the job relocation expense deduction and you can find a section of the text below. Checkout the RDTC Tax Help Blog to see the full entry, as well as former deduction of the week articles.
Examples of Moving Expenses that can be Deducted:
- Packing and transportation costs for moving household goods
- The cost of shipping goods from a place other than your former home (such as a storage unit)
- Any storage bills or fees for disconnecting or reconnecting utilities
- All move-related travel expenses (such as mileage, tolls, lodging, parking fees, etc.)
- Expenses of shipping and relocating your car and/or pets to your new home.
Expenses that can NOT be Deducted:
- License plates and registration for your car
- Any part of the purchase of a new home or expenses of leasing a new apartment
- Real estate taxes or lost security deposits
Relocation Rules
According to the IRS, “you can generally consider moving expenses incurred within one year from the date you first reported to work at the new location as closely related in time to the start of work. It isn't necessary that you arrange to work before moving to a new location, as long as you actually do go to work.”
Time Test
To qualify for the deduction you must work full time for at least 39 weeks during the first year after starting the new job. You do not necessarily have to work for the same employer, and you do not need to work for 39 weeks consecutively. However, you will need to work full time within the same commuting area for 39 full weeks.