What are moving expenses?
Moving expenses are costs incurred when you move because of your job. The expenses are deductible if they are reasonable costs for moving yourself, your family and your possessions. However, you can no longer deduct the cost of meals while moving.
Moving is expensive, but not all moving expenses are tax deductible. The IRS has a three-part test to tell whether moving expenses can be deducted.
- Your move must be connected to a new job or relocation for work.
- Your new workplace must be at least 50 miles farther from your old home than your old job location was from your old home.
- You must work full time for 39 weeks in the 12 months following the move. Self-employed taxpayers must work for 39 weeks in the 12 months and 78 weeks in the next 24 months.
Common moving expenses:
- A moving van.
- Airfare or travel to your new city.
- Boxes and packing supplies.
Expenses that are not deductible:
- Penalties for breaking a lease.
- Mortgage penalties.
- House hunting expenses.
- Real estate broker’s fees.
- Rent for temporary housing.
A more comprehensive list of tax-deductible moving expenses can be found in IRS Publication 521.
Moving expense example
You accept a new full-time job that requires moving from Georgia to California. You sell your house through a real estate agent and hire movers. After all of your furniture is packed, you and your family fly to California and move into a condo that you will rent until you find a new home to purchase.
In this example, the move meets the IRS criteria. The move is work related, it is a full-time position and it is more than 50 miles away. The movers and the family’s airfare are tax deductible. The real estate fees and condo rent are not, even though they are expenses the family incurred because of the move.