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Anne Powelson Anne Powelson
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People on the Move

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Spring is moving time, as evidenced by vehicles jammed with possessions. I saw one pickup piled three layers high: first boxes, then a canoe, and on top, two sections of a green sofa. Now, I hope they weren't headed very far, but maybe you, or someone you know, is.

If you move over 50 miles for business reasons, your move may be deductible. This is true even if you are moving to take your first job or to return to work after not working for a significant period. Moving can even be deductible for self-employed people.

Who can deduct moving expenses?

Different rules apply for members of the Armed Forces and retirees moving back to the United States after working overseas, but for most people, deductible moves must meet three criteria:

First, the move must be closely related in time to the start of new work. A move within one year of beginning a new job is generally considered to be closely related in time. Special circumstances may allow a longer time period.

Second, the move must meet the distance test. The distance test is met if the commute from your original residence to your new job location is at least 50 miles more than your original commute. If you are not currently working, your original commute is zero miles. After you have made the move, your new commute must be closer in distance, cheaper, or faster than if you had stayed in your prior residence.

Third, you must meet the time standard for work in your new location; working full time for a 39-week period in the twelve months after you move. Self-employed people have a dual standard to meet; 39 weeks in the first twelve months and 78 weeks in the first 24 months.

What if something goes wrong after you've made the move and you can't meet the 39/78 week period of employment?

Assuming you've found full time work at the new location, there are exceptions if you are transferred for your employer's benefit or if you are laid off. Exceptions are also allowed for disability or death.

Which moving expenses can be deducted?

Deductible moving expenses are non-reimbursed expenses for these items:

a. packing and transporting your household items and pets;

b. driving expenses: tolls plus either $.235/mile or your actual gas and oil expenses;

c. transportation expenses: maybe you're taking a bus to San Francisco or flying to Hawai'i?

d. lodging en route and the first night in your new location;

e. storage and insurance fees for your household goods for up to 30 days;

f. costs for disconnecting or connecting utilities associated with moving household items.

Moving expenses are a front page deduction (or, technically, anadjustment) so they are available even to those who use a standard deduction.

Good luck to those starting new jobs, and keep your receipts so you can use them at tax time!


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