DEDUCTIBLE MOVING EXPENSES

Q. I am relocating to a new job in a new community. Could you give me some guidance on the tax write-offs?

A. Congratulations on the new job. There are a lot of people looking for employment. Here is a primer on moving expenses:

Work Related
The move must be closely related to start of work. Generally, you can consider moving expenses incurred within one year from the date you first reported to a new location, as closely related in time to the start of work.

Distance Test
Your move meets the distance test if your new main job location is at least 50 miles farther from your former home than your previous job location was. If you are close to the 50 mile requirement check the rules closely.

Time Test
You must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location, or at least 78 weeks during the first 24 months if you are self-employed. If your income tax return is due before you’ve satisfied this requirement, you can still deduct your allowable moving expenses if you expect to meet the time test in the following years.

Travel
You can deduct lodging expenses 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 to move, but you can only deduct one trip per person.

Household goods
You can deduct the cost of packing, crating and transporting your household goods and personal property. You may be able to include the cost of storing and insuring these items while in transit.

Utilities
You can deduct the costs of connecting or disconnecting utilities. Many people miss this deduction.

Items Not Deductible
You cannot deduct as moving expenses: any part of the purchase price of your new home, car tags, drivers license, costs of buying or selling a home, expenses of entering into or breaking a lease, security deposits and storage charges except those incurred in transit.

Don't forget, if your employer reimburses you for the cost of the move, the reimbursement may have to be included on your income tax return. Also remember to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS.