Dear Tax Talk,
I am moving from Miami to Tampa, Fla., to start a new job. What kinds of moving expenses are deductible?
Job-related moving expenses are tax-deductible as an adjustment to gross income. This means that they will provide a tax benefit even if you don't itemize your deductions. To be deductible you have to meet three tests:
- Your move is closely related to the start of work.
- You meet the distance test.
- You meet the time test.
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. If circumstances prevent you from moving within this time frame, you may still be able to deduct your moving expenses. For example, if you move after 18 months to allow your children to finish school at your former home, your move is still considered closely related to the start of work.
Your move will meet the distance test if your new main job location is at least 50 miles farther from your former home than your old job location was from your former home. For example, if your old job location was three miles from your former home, your new job location must be at least 53 miles from that former home.
In your case, a move from Miami to Tampa, Fla., is probably putting you 200 miles away, so you would meet this test.
If you are an employee, 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 (the 39-week test). In determining the 39 weeks, you would not discount absences for illness, vacation or in the case of a teacher, summer break.
The work does not have to be for the same employer. For example, if you move and shortly thereafter change employers in the new location, the 39-week test is met counting all employers in the year.
If you meet all the tests for deducting moving expenses you'll need to complete Form 3903 to claim moving expenses. The deduction for moving expenses has been extremely narrowed over the years. Your deduction is limited to the reasonable expenses of:
- Moving your household goods and personal effects.
- Traveling (including lodging, but not meals) to your new home.
Basically, you can deduct the amount you pay a moving company and something for the one-way trip from Miami to Tampa. If you drive to your new home, you can deduct the cost of driving the car, such as gas and tolls, or use the standard rate of 19 cents a mile. If some members of your household fly, you can include their plane tickets in addition to the car expenses. IRS Publication 521 discusses moving expenses.
To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Taxpayers should seek professional advice based on their particular circumstances.
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