Question: Can I deduct moving related expenses?
Answer: Yes, you may be eligible to deduct moving expenses.
If you have to relocate as a result of getting a new job or being transferred to a new area by your current employer, you may be eligible to deduct moving expenses on your tax return (Form 1040). You would have to include all of your applicable IRS moving expenses on the appropriate form of your personal return. There are three rules that you must satisfy in order to deduct those expenses:
- Your move is closely related to the start of your work. Essentially, you must move within a year of starting the position.
- You must meet the distance test. Your new main job location must be at least 50 miles further from your former residence than your old main job location was.
- You must meet the 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.
Deductible IRS moving expenses include:
- Transportation expenses
- Storage of household goods and personal effects
- Travel expenses from your old home to your new home
- Lodging expenses
Please note that meals are not deductible
If you had eligible IRS moving expenses and forgot to include those on any previously filed tax returns, you can still go back and file an amendment. By filing Form 1040X, you can possibly decrease your total taxable income for those tax years and potentially get a refund. It should be noted that you have 3 years from the date you filed the original tax return to go back and file an amendment. Once the amendment has been filed, the IRS takes approximately 4-12 weeks to process the amended tax return. Therefore, receiving a tax deduction for moving expenses on your tax return should be straight-forward.