James Accounting & Tax Practice, P.A.

This overlooked tax deduction can be money in your pocket

Summertime is often a time for moving. The kids are out of school and new opportunities await. Don't forget that your move might be tax deductible. Here are some hints to ensure you do not forget this valuable tax deduction.

Job related… 50 miles or more… 39 weeks

To have moving expenses qualify as a tax deduction your move must be closely related to your new job.

Think at least 50 miles. To qualify to deduct your moving expenses, your new workplace must be at least 50 miles further than your drive from your old home to your old work.

Example; If your old drive to work was 20 miles, your new workplace must be at least 70 miles away from your old home.

Think 39 weeks. To have your move qualify you must work at your new job for at least 39 weeks within the twelve months following your arrival at the new location. If you are self-employed you can still qualify for the deduction by meeting the 39 week test plus a 78 week test for the first 24 months after your move.

There are exceptions. Like most aspects of the tax code there are exceptions. The biggest one is for those in the Armed Services. You do not need to meet the moving tests if you have a change of station or are under military orders to move.

What can you deduct. Save all reasonable moving related expenses. This includes the cost of packing and moving your household items and related transportation costs. You can deduct the cost of your auto's gas and oil or take the standard moving mileage deduction of 23.5 cents per mile. Even temporary storage of household items and lodging might be deductible.

Since there are many rules about what can be deducted during a move, it is important to keep all move related documents. While some of the expenses might not be deductible, if you do not keep proper documentation none of the moving expenses will be available to you as a deduction.

P.S. If moving, do not forget to also let the IRS know of your address change. This can be done by filing out Form 8822.