Have you been offered a new job in a new city? If the location of your new job is at least 50 miles further from your previous residence than your last office was, you may be entitled to a deduction. We know, we know…. We don’t write the rules, just try to present the facts. But back to moving expenses… In addition to the 50 mile rule, if you are an employee, you must work full-time at the new location for at least 39 weeks during the first 12 months following your start date. Self-employed individuals must work in the new location at least 78 weeks during the first 24 months.
Let’s say you move your family from Boston to Naples for a new career opportunity in November of 2012. Obviously you’ve got the 50 mile test covered. When you get ready to file your 2012 tax return (in 2013), you may deduct your moving expenses on the 2012 return even though you may not have worked the full 39 weeks yet. If you fail to meet the 39 week test after you have already taken the deduction, you must either 1) report the moving expense deduction as other income on your 2013 Form 1040, or 2) amend the prior year return.
Now before you go too crazy, not all moving expenses are deductible . Deductible expenses include the costs of moving household goods and personal effects (including pets) from the old house to the new, and the travel costs (including lodging) you pay to get yourself and your family to the new home. For travel, you may either deduct actual auto expenses or $.23/mile.
You may not deduct the cost of meals, house hunting trips, temporary lodging near the new work site, expenses related to the sale of the old home (or purchase of the new) or the expense of settling a lease on an old residence or acquiring a lease on a new residence.
See IRS Pub 521 , Moving Expenses for more details.
*Note: A member of the Armed Forces on active duty who moves because of a permanent change of station does not have to meet the distance and time tests.