A Road Map To Moving Expense Deductions
by Bernard Fruchtman, Esq.
(Excerpted from TaxTalk – Plain & Simple)
A tax deduction for moving expenses is available to employees and self-employeds for qualified moving expenses. Qualified moving expenses are deductible directly from gross income. That means they aren’t subject to the 2% floor that applies to most itemized deductions. It also means that non-itemizers can take the deduction in addition to the standard deduction. You can use the following outline as a road map to guide you to take full advantage of the moving expense deduction.
- The move must be job related for the moving expenses to be deductible.
- The move can be for a first job, a new or a changed job or business location, or a transfer.
- A person who moves to the US to retire and whose former principal place of business and residence were outside the US is eligible to deduct moving expenses.
- Employees:Employees must work full time for at least 39 weeks in the first 12 months after arrival at a new job location.
- Self-employeds: Self-employed persons must work full time for at least 39 weeks in the first 12 months and at least 78 weeks in the first 24 months after arrival at a new job location. Full time work as a self-employed or as an employee counts.
- You’ll be able to deduct moving expenses only if your new job location is at least 50 miles farther from your old house than your old job was from your old house.
- Only the direct expenses of moving household goods and personal effects from your former home to your new home are deductible.
- The travel costs of a single trip for you and your family are deductible.
- Travel expenses include the cost of lodging but not meals en route.
- The following indirect moving expenses are not deductible:
- Pre-move house hunting trips
- Temporary lodging in the new location
- Expenses of buying or selling a house
- Costs of terminating an unexpired lease
Bernard Fruchtman, Publisher/Editor of TaxTalk – Plain & Simple. TaxTalk – Plain & Simple, is a monthly newsletter that helps you save money by reducing your taxes. An annual subscription is $48 per year. For more information and a FREE ISSUE see web page at: http://village.ios.com/~taxtalk or send your regular name and address to TaxTalk, Inc., 1562 First Ave., New York, NY 10028