taxes

Qualifications for moving deduction

George SaenzDear Tax Talk,
My question is: Can I get a moving deduction for expenses totaling more than $6,000? I moved from one part of the state to another 91 miles away. I relocated because of a job offer. I commuted for three months, rented a property for three months and then purchased a home in November 2012.
-- Jenny

Dear Jenny,
The deduction for moving expenses is an often-overlooked deduction. The deduction has been around for ages and is one that has withstood the budget axe for the most part. Since the moving deduction is an adjustment to gross income, you do not have to itemize your deductions to get a tax benefit if you qualify.

Qualification requires that you meet three tests.

  • Your move is closely related to the start of work.
  • You meet the distance test.
  • You meet the time test.

Under the first test, your moving expenses have to be closely related in time and place with the start of work at your new job location. Generally, the Internal Revenue Service considers closely related in time as moving expenses incurred within the first year of your new job start. Assuming you moved when you purchased the home, you qualify under the first test.

Under the distance test, your new job must be 50 miles farther than your old job was from your former home. For example, if you used to commute three miles to your old job from where you lived before, you meet the distance test if your new job is more than 53 miles away from your old home.

The time test requires that you maintain a full-time position in your new location for 39 weeks during the first 12 months after starting the new job. The 39 weeks commence when you start the new job, so you've probably already met that test. Hence, the moving deduction is not for retirees heading to Florida.

So based on your facts, it appears that you would qualify to deduct your moving expenses. Use Form 3903 to claim work-related moving expenses.

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