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A closer look:
Income tax deductions

Cut the costIf your move is work-related, you may be able to deduct certain moving expenses. The key is whether you meet the IRS tests for time and distance.

Time test:
A) According to the IRS Web site, "You can generally consider moving expenses incurred within one year from the date you first reported to work at the new location as closely related in time to the start of work. It isn't necessary that you arrange to work before moving to a new location, as long as you actually do go to work."

Fortunately, the IRS gives an example to clear that up.

You must move within one year of starting a new job if you want to deduct the moving expenses. But if you can show that circumstances delayed the move, you can still deduct.

For example, if you moved for a new job, but your family stayed behind for 18 months to let the kids finish high school, you still can deduct your allowable expenses.

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B) You have to work full time in your new job for at least 39 weeks during the first 12 months.

If you're self-employed, you need to meet the above requirement plus work full time for a total of 78 weeks during the first 24 months.

There are exceptions to the time test -- they're spelled out on the IRS Web site.

Distance test:
Your new job must be at least 50 miles farther from your old home than your old job was from your old home. In other words, if you lived three miles from your old job, your new job has to be at least 53 miles from your old home.

Deductible moving expenses:
Check for new rules, but here's what is currently deductible.

Household goods and personal effects

  • Deduct the cost of packing, crating and transporting household goods and personal effects belonging to you and your family. You can include the cost of storing and insuring these items within any period of 30 consecutive days after the day your things were moved out of your former home and before they were delivered to your new home.
  • The cost of connecting or disconnecting utilities.
  • The cost of shipping your car and pets.
  • The cost of shipping your household goods and personal effects from a place other than your former home. In other words, if they were in storage at some place.

Travel expenses

  • Transportation costs for you and your family en route to your new home. If you travel by car you can use actual expenses for gas and oil, or you can take whatever the IRS is granting that year as a per mile cost. Be sure to keep receipts to account for your expenses. You can also deduct parking fees and tolls, but you can't deduct repairs, maintenance, insurance or depreciation.
  • Lodging costs for you and your family are also deductible, but you can't deduct any expenses for meals.

You may also be able to deduct some expenses related to the sale or purchase of a home. Check with the IRS or your tax preparer for specific details.

-- Posted: Oct. 15, 1999

Quick take | A closer look | Cut the costs | Cut the confusion

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See Also
Moving glossary
More moving stories

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