Deductible Moving Expenses
When you move to take a new job, you can deduct your moving costs – or much of them, anyway – from your taxable income. But if the move is not for a work relocation (you’re moving to be closer to family, for example), it won’t qualify for the deduction.
The IRS has a few tests to see if your move qualifies for the deduction:
- First, your new job has to be at least 50 miles farther from your former home than your previous main job was. For example, if your old employment location was three miles from your former home, your new job site must be at least 53 miles from your former home. A move across town won’t qualify.
- Your moving expenses have to be incurred within one year of reporting to your new job. And once you do start work in your new location, you’re required to work full time for at least 39 weeks during the first 12 months to qualify for the deduction.
If you’re self-employed, you’ll also have to meet the distance test – and you have to work full-time for a total of at least 78 weeks during the first 24 months in your new location. If your income tax return is due before you have satisfied this requirement, you can still deduct your allowable moving expenses if you expect to meet the time test. Publication 521, Moving Expenses has more information on special rules and exceptions to these general rules.
You can deduct lodging (but not meals) for yourself and household members while moving from your former home to your new home. You can also deduct transportation expenses, including airfare, vehicle mileage, parking fees and tolls you pay, but you can only deduct one trip per person.
You can also deduct the cost of packing and transporting your household goods and personal property, as well as the cost of shipping pets. If you have to store items during the move, that may qualify for deduction too. You can also deduct the costs of connecting or disconnecting utilities.
What's not deductible? Any part of the purchase price of your new home, car tags, driver’s license renewal, the costs of buying or selling your home (or entering into or breaking a rental lease), or security deposits and storage charges (other than those incurred during your move).
The IRS limits deductible moving expenses to what is “reasonable for the circumstances” of your move. For details, see Form 3903, Moving Expenses.
If your employer reimburses you for the costs of your move, the reimbursement may have to be included as income on your tax return.
You can write off your moving expenses even if you don't itemize deductions. To claim the deduction, enter your expenses on our Form 3903. Our interview will help you get to the right form.