The Tax Deductible Work-Related Moving Expenses You May Not Know About
Are you in the process of moving for work relocation or work-related reasons? If so, you may be wondering what expenses are tax deductible. Here are some tax-deductible work-related moving expenses you may not know about.
The good news is that there are several moving expenses that you can deduct from your taxes.
In this blog post, we will discuss some of the most common work-related moving expenses and how to claim them on your return. Keep reading for more information!
One of the most common deductible moving expenses is the cost of professional movers. If you hire a company to help you with your move, you can deduct the cost from your taxes. This includes both the cost of labor and any materials that were used in the move (such as boxes and packing supplies).
Another common deductible expense is the cost of travel. If you have to drive a long distance to your new home, you can deduct the cost of gas and lodging from your taxes. This is a great way to save money if you are moving a long distance!
Some of the work-related tax-deductible moving expenses include:
-transportation and storage of your household goods and personal effects
-travel (including lodging) from your old home to your new one
-utility connection fees (including hookup and turn-on)
-packing, crating, and drayage
-insurance and security deposits
-certain rental expenses (including rent, utilities, and fuel) for the first 30 days after you arrive in your new home
Job Relocation
If you have to move due to a job change, you may also be able to deduct the cost of your job search. This includes the cost of resumes, applications, and interviews. If you are relocating for a new job, be sure to keep all of your receipts so that you can deduct these expenses on your return.
Distance Test
If your new job is at least 50 miles away from your old home, you pass the distance test. And if you work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location, you pass the time test. There are a few more requirements, but these two are the most important.
If you’re planning on relocating for a new job, be sure to talk to your tax advisor about the moving expenses you may be able to deduct on your tax return. It could save you a lot of money!
Time Test
If you meet the time test requirement, you may be able to deduct your moving expenses come tax time. Be sure to keep all of your receipts and documentation so that you can prove your expenses if needed.
There are several exceptions to the time test requirement, including:
-If you are being transferred to your employer’s request
-Being a member of the armed forces and you are moving on orders
-Health issues forcing you to terminate the employment
If any of these exceptions apply to you, then you may be able to deduct your moving expenses come tax time. Be sure to keep all of your receipts and documentation so that you can prove your expenses if needed. Moving can be expensive, but with a little bit of planning, it doesn’t have to be a financial burden. Be sure to take advantage of all the deductions and credits you are entitled to so that you can save as much money as possible.
Remember, you can only deduct moving expenses if your move is closely related to the start of a new job or business. So if you’re moving for personal reasons, such as to retire or to be closer to family, your moving expenses unfortunately won’t be tax-deductible. For more information on what is and isn’t deductible, consult a tax professional or the IRS website.
Which moving costs are not deductible?
Most people are aware that they can deduct certain moving expenses come tax time. However, what many don’t know is that there are several exceptions to this rule. For example, the cost of meals during travel is not tax deductible. Nor are moving expenses that were previously reimbursed by your employer. Additionally, costs associated with buying or selling a home, such as real estate agent fees, are not tax deductible. And finally, security deposits and lease-related charges are also not tax deductible. So before you start packing up your life and Moving to a new city or state, be sure to do your research and know which expenses will and will not be tax-deductible. Otherwise, you may end up paying more in taxes than you anticipated.
Now that you know about all the tax-deductible moving expenses, you can easily calculate your real moving costs. This knowledge opens up new possibilities and allows you to stretch your moving budget further than you might have expected. Be sure to make a proper moving checklist, including an inventory list of all your belongings. Follow and note down all the steps involved in the move, and keep track of your expenses adequately. By doing so, you’ll be able to relocate without any stressful surprises.
Contact us at Moving by Design to schedule a consultation and get a quote for your next relocation!
This article is meant to be informational and does not constitute financial, tax, or legal advice. Please consult a qualified professional for advice specific to your situation.
