Qualification to deduct moving expenses to your federal income
In order to offset the deduction of federal income tax expenses, the IRS states that your step must meet three requirements:- It should closely relate to the beginning of work. You can only apply for deducting moving expenses for one year from the moment you start work. This means that if you do not get close to work during the first 12 months of work, you will lose the opportunity to deduct moving expenses.
- Your new job would add at least 50 miles to you if you stay in your old home. For example, if your old job required you to move only 5 miles from your old home to your previous job, your transition to a new job should be at least 55 miles from your previous place of residence.
- After you move, you must work full time in your new job for at least 39 weeks in the first 12 months of work. If you are self-employed, you must work at least 78 weeks full time during the first 24 months of your new job.
Notable exceptions
Military personnel
If you are a member of the US military, and your turn was caused by a military order and a constant change of station, you do not need to meet all the requirements. You can easily deduct your moving expenses.Pensioners
If you are retiring to the United States after working abroad, you do not need to meet the time requirements. Your former place of work and your former home must have been outside the United States. If you already live in the United States, you retire, then move to another part of the US state and remain in retirement, you cannot claim a deduction for expenses.Survivors
If you are a spouse or dependent on someone who worked outside the United States, and that person dies, you can usually deduct the costs of moving if you live with that person, and then go to the United States within six months after death.What could you deduct?
If you meet the requirements, you can deduct some expenses related to your movement, but not all. The IRS states that you can claim a deduction for reasonable expenses related to moving your household and personal items, as well as expenses related to traveling to your new home. Eligible costs may include:- Transportation for yourself and your family members during travel
- Accommodation during your travel
- Packaging and delivery of your household goods
Here is what you cannot deduct:
- The cost of food while driving
- Any purchase price of your new home
- Cost of selling an old house or terminating a lease
- Any moving expenses that your new employer will pay you for
What you will need to claim a deduction?
If you are claiming a deduction for expenses, you will need documentation to declare it. The IRS recommends saving receipts, bills, canceled checks, credit card applications and run journals. As a rule, it is a good idea to adhere to any documents that confirm your moving expenses if a question arises after filing a tax return.What to do?
Of course, a claim for any type of tax deduction may require the filing of additional tax forms. In addition to filing your federal income tax refund form (for example, 1040, 1040A, or 1040EZ), you will also need to fill out form 3903 "Moving Expenses". There are free online tax collection services. They support form 3903 and can walk you through the process of filling out federal and state income tax returns. The free online tax collection service uses a series of questions about your finances and situations that will help you step by step in this process, including defining deductions that you may qualify for, for example, transfer costs.How much can you claim?
IRS Publication 521 does not set a limit in US dollars for deductible transportation costs. However, even if your moving expenses meet the criteria for subtraction, it is still advisable to adhere to all the documentation related to your movement.
