Is Moving Tax Deductible?

Its tax season and you may or may not know but moving expenses are tax deductible. If you moved to start a new job, or to work in a new city you may be able to deduct the cost of your move. The cost of shipping your household goods as well as travel and lodging can all be deducted. Unfortunately meals are not considered part of the deal. There are a few limitations and stipulations.

What are the Limitations?

You can deduct the cost of moving expenses that exceed any reimbursements from your employer. You will have to meet the qualifications if you are to claim this tax deduction.

What are the Qualifications?

The relocation must be because you started a new job. In order to qualify you must meet the distance and time tests. But if you are moving to the USA from another country as a retiree, you can deduct your moving costs without needing to start a new job in the United States.

What is the Distance Test?

Your new job must be at a minimum of 50 miles farther from your old home than the distance between your previous home and your previous job.

Time Test:

In order for this to work you must work full-time for at least 39 weeks during the 12 months following your move. If you are self-employed, you must work at least 78 weeks in the 24 months after you move.

Where do you Claim Deduction?

Moving expenses are reported on IRS Form 3903, with the total expenses also reported on Form 1040.

From the IRS:

“If you meet the requirements, you can deduct the reasonable expenses of moving your household goods and personal effects to your new home. You can also deduct the expenses of traveling to your new home, including your lodging expenses. You cannot, however, deduct meals.” (from IRS Tax Topic 455) Retirees relocating to the US after working abroad should refer to the IRS article, Moving Expenses to and from the United States.
Tax Law:

The moving expense deduction is found in Internal Revenue Code Section 217 and in the related Treasury Regulations section 1.217-2.