Update, March 29, 2018: When you move for a job, the costs of getting you and your family to your new work location are deductible … as long as you're claiming them on your 2017 tax return. Under the new Tax Cuts and Jobs Act law that took effect on Jan. 1, 2018 and is in place through 2025, Uncle Sam will underwrite some relocation costs only for members of the military.
But if you moved last year and want to claim the expenses, which you don't have to itemize, read on for tips on deducting those costs.
When the hubby and I returned home to Texas and settled into our Austin house four years ago, I swore I would never, ever move again.
Moving, even if you don't have a lot of stuff, is a pain in the behind. So my pledge to stay put was motivated as much by the hassle factor as it was by my love of our new city and new home.
Today the hubby and I are moving again. Sort of.
We're not going far. Actually, we're not leaving our house. We're just moving most of our downstairs furnishings to our upstairs rooms.
It's definitely not a task we're undertaking for fun. It's 11+ on the 10-point hassle factor scale.
But it's move that has to be made because three-quarters of our downstairs is going to be redone due to damage from our water heater leak late last month.
Most of the repair costs, and there are plenty of them, will be paid by our homeowners insurance. Of course, I don't want to think about what it will do to our premium next year, but that's a 2010 worry.
When moving is deductible: Regardless of a possible rate hike, we're very thankful for the insurance payments, since our "move" definitely doesn't qualify for any tax breaks.
There are some basic IRS requirements to meet before you can write off moving costs.
First, your move has to be connected to work. You can move for a job or get one after you've relocated.
You also must meet specific time and distance tests in connection with your new job:
- You have to work at your new location for at least 39 weeks in the first year after your move (if you work for someone else; you get twice that time if you are self-employed); and
- Your new job must be at least 50 miles farther from your previous residence than your last office was from that former home.
Deciphering deductible distance: The distance test is the most confusing. The diagram below, from IRS Publication 521, illustrates the mileage requirements. You can click the image for a bigger view, or turn to page 3 of Pub. 521.
Basically, the IRS wants to make sure that you're not just moving to get an easier commute.
Obviously the hubby and I don't meet any of the tests, although I do believe we've schlepped more than 50 miles up and down the stairs today relocating our stuff in advance of flooring, drywall and painting crews.
And our backs have definitely been taxed by the efforts. In fact, I'm sure our bodies will be paying for it even more tomorrow.
But if you are really, truly moving, here are two pieces of advice.
First, hire movers! I don't care how young and energetic you are, you're never in good enough shape to move all your stuff.
Second, be sure you claim all your allowable moving expenses. That includes the moving company costs, as well as many other associated outlays.
You can find details on these deductions in the previously mentioned Pub. 521, as well as my post Writing off job-related moving costs.