None of us like to pay taxes every year to the Internal Revenue Service. We look forward to getting some of our money back. If you moved for a new job in the past year, congratulations! The IRS allows you to deduct your moving expenses for a work-related move. Read on to learn how you can qualify for it.
Deduct Your Moving Expenses
Whether your company transfers you, you move for a new job or start your first job, keep good records. The IRS guidelines recommend saving receipts, bills, canceled checks, credit card statements and mileage logs. Additionally, keep a copy of your W-2 from your employer that details your income and tax information. If it applies, file any information from your employer about the amount they paid to help you move. These documents will come in handy when you file your tax return.
Qualifying for Tax Deduction
While the IRS puts no limits on the amount you can claim, the expenses must meet certain requirements to qualify. The IRS conveniently offers an Interactive Tax Assistant to help you determine what costs you can claim to reduce your federal tax burden. Just answer a few questions. Additionally, if you decide to deduct your moving expenses, the IRS requires your move to pass two tests.
50-Mile Test
First, any move you make for a new job must be 50 miles or greater from your old home. You cannot deduct your moving expenses, if this fails to be the case.
39-Week Test
Additionally, you must start your new job and work full-time for at least 39 weeks within the first 12 months after your move. It’s OK to change jobs in the same area after moving. If your company transfers you again or even lays you off, the IRS will waive the 39-week mandate and allow you to qualify for the deduction.
Moving Expenses that Qualify
All moving expenses must be reasonable and relate to your move. Some examples include the price of gas or the mileage on your vehicle, rental trucks, short-term storage, boxes and other moving supplies. For a longer move, it would include the cost of lodging over night during travel to your new home. However, you cannot include the costs of meals.
You do have the option to log your own transportation costs by keeping track of gas, oil, parking fees, tolls, etc. If not, you can always choose the 17 cents per mile rate the IRS pays and use it to determine your final costs.
Reimbursement by Your Employer
If your employer pays for your move, then, understandably you cannot deduct your moving expenses on your tax return. Many companies will generously pay for meals, temporary housing and other items not covered by the federal government’s standard eligible deductions.
Calculating Your Deduction
To deduct your moving expenses, use IRS Form 3903. Put shipping and storage costs on line 1. Put travel, lodging, and gas costs on line 2. If you had out-of-pocket costs, and if they exceeded a payment from your employer for your moving expenses, report this amount on line 4.
Add it up and the total amount then goes in the “Adjusted Gross Income” section on the line for “Moving Expenses” on IRS Form 1040. This form reports your taxable income and the amount of your total refund, if eligible. In 2017, the average tax refund reached $2,763.
Master Movers Offers Affordable Costs to Our Valued Customers!
Hire Master Movers for your cross-town, cross-country or international move at a fair and affordable rate. We give our valued customers a detailed, transparent breakdown of their moving costs. Call Master Movers’ friendly and expert staff today for all your moving needs! And keep in mind when you’re moving for your job, if qualified, the costs related to the move could be tax deductible!