Moving and Taxes: What Can You Deduct?

Americans are very mobile with roughly 14% of the US population moving annually. This represents 40 million people and they move for many different reasons and mobility changes based on age group. People in their 20s move more frequently than any other age group and we move less as we grow older.

A majority of moves happen within the same county with 65% due to housing related reasons. Long distance moves (outside your county/state) are due to family reasons (27%), housing related reasons (32%) and 31% of long distance moves are due to work related reasons. If you moved recently, you'll want to read this article to learn if you qualify to deduct moving expenses on your taxes.

Moves (2010) May Lower Your Taxes

… By Rick Olson, CFO at Atlas Van Lines

According to a leading national human resources publication, American Business spent more than $30 billion to relocate workers in 2010. Workers themselves spent billions more in unreimbursed expenses.  If you are in the latter category there’s some good news: many of you will have another deduction to add as the April 15 Internal Revenue Service filing deadline approaches.

Can Your Move Meet These 3 Conditions?

Even if you don't file an itemized return, you can deduct moving expenses if your move meets these three conditions:

1. Closely Related to the Start of Work

   Generally, you can deduct moving expenses incurred within one year from the date you first report to work.

2. Meets the Distance Test

You may qualify for a deduction if your new job location is at least 50 miles farther from your former residence than your old job. For example, if your previous job was located three miles from your former residence, your new job must be at least 53 miles from your former residence. (See Federal Tax Form 3903 to see if you qualify.)

3. Meets the Time Test

You may qualify for a deduction if you work full-time for an employer in the general vicinity of the new job location for 39 weeks during the 12-months following your move. This condition is waived if you: 1) cannot satisfy it because of death, disability, or termination for reasons other than for willful misconduct, and 2) it is reasonable to expect that you would have otherwise fulfilled the condition.

What Moving Expenses Can You Deduct?

The non-reimbursed cost of moving household goods and personal effects to a new residence is permitted as a deduction in determining federal adjusted gross income. This includes the actual cost of transportation or hauling from your old residence to your new one; the cost of packing, crating and unpacking; storage-in-transit and valuation (each limited to 30 consecutive days).

Your deductible expenses can include the following:

• The cost of shipping your automobiles and boats.
• The cost of transporting your household pets, including dogs, cats, tropical fish, etc.
• The moving-related costs associated with connecting and disconnecting utilities
• The cost of moving your personal belongings from a place other than your old residence (such as a summer home or relative's home), but not in excess of what it would have cost to move them from your old residence
• The family trip to the new residence is deductible — this includes lodging but not meals.

Resources

There are many IRS publications available to help you determine all your allowable deductions. In addition to these websites, you can search for audio and video recordings that can help you complete your Federal Tax Forms. You can also call the IRS toll free (800-TAX-FORM or 800-829-3676) for tax publications, forms and instructions.

• IRS Publication — 521 Moving Expenses
• IRS Problem Solving Line — call 800-829-1040
• IRS Web Site — for other tax related information, visit www.irs.gov.

For additional questions contact the IRS or your tax advisor.

For more moving tips from Atlas Van Lines, visit How to Move!

Richard J. Olson has been with Atlas Van Lines since 1984 when he joined the company as the Director of Internal Audit and Taxation. He has held numerous positions within Atlas, all within the financial side of the business and is now a Senior VP and Chief Financial Officer. Richard has been involved in the acquisition of several complimentary businesses including Cornerstone Relocation Group and Titan Global Distribution.