If you move to your new home to join a new job or start a business, you can deduct the Moving Expenses as an adjustment to the income. It means that you will get this deduction even if you don’t itemize your expenses. To be deductible, you must meet the distance and time tests. Your move must be closely related to the start of work. (Exception: Different rules may apply if you are a member of the Armed Forces or a retiree or survivor moving to the United States.)
The Time & Distance Tests
The Time Test. As an employee, you must work full time in the general area of your new workplace for at least 39 weeks during the 12 months right after your move. If you are self-employed, you must work at least 39 weeks during the 12 months right after your move AND a total of at least 78 weeks during the 24 months right after your move.
The Distance Test. The new principal workplace must be at least 50 miles farther from your old home than your old workplace was. For example, if your old workplace was 3 miles from your old home, your new workplace must be at least 53 miles from that home. If you did not have an old workplace, your new workplace must be at least 50 miles from your old home.
Form 3903 Moving Expenses
Moving expenses are figured on Form 3903 line 5 and deducted as an adjustment to income on line 26 of Form 1040 or line 26 of 1040NR. You cannot deduct any moving expenses that were reimbursed by your employer.
On the Form 3903 line 1 you enter your total expenses for transportation and storage of household goods. and personal effects. On line 2 you enter your expenses for travel including lodging from your old home to your new home. On line 4, you enter the total amount your employer paid you for the expenses on lines 1 and 2 of Form 3903 that is not included in box 1 of your Form W-2 (wages). This amount should be shown in box 12 of your Form W-2 with code P.
If you incurred or paid the moving expenses in 2009 and were not reimbursed, you must claim them in 2009 even when you expect to meet 39 weeks test in 2009. If later you are unable to meet 39 weeks test, then you must file an amended tax return.
If you were reimbursed for your expenses and you use cash method of accounting, you can deduct your expenses either in the year you paid them or in the year you received the reimbursement.
If the new workplace is outside the United States or its possessions, you must be a U.S. citizen or resident alien to deduct your expenses. Also if you qualify to deduct expenses for more than one move, use a separate Form 3903 for each move.
Standard Mileage Rate
For 2007, the standard mileage rate for using your vehicle to move to new home is 20 cents a mile. For 2008 this rate is 19 cents (Jan 1 to June 30) and 27 cents (for July 1 to Dec 31) per mile driven for moving purposes.
Moving expenses that you can deduct
You can deduct the reasonable expenses of moving your household goods and personal effects (including in-transit or foreign-move storage expenses), and traveling (including lodging but not meals) to your new home. You cannot deduct any expenses for meals. Also the cost of traveling from your former home to your new one should be by the shortest, most direct route available by conventional transportation. You can deduct moving expenses you pay for yourself and members of your household.
You can deduct any costs of connecting or disconnecting utilities required because you are moving your household goods, appliances, or personal effects. You can deduct the cost of shipping your car and your household pets to your new home. You can deduct the cost of moving your household goods and personal effects from a place other than your former home including the cost of storing and insuring household goods and personal effects within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home.
For more information, read IRS publication 521. Moving Expenses.
List of Articles
Your Filing Status
1. Filing Status for Married
2. Filing Status: Head of Household
Exemptions for Dependents
1. Requirements for claiming a dependent
2. Child of separated or divorced parents
1. Filing Requirement for a Dependent
1. W2 vs 1099-Misc: Employee vs Independent Contractor
2. Tax Filing by Self Employed Sole Proprietor or Independent
3. Filing W4 Employee’s Withholding Allowance Certificate
Your Foreign Income
1. U.S. Citizen or Resident with Foreign Income
2. Foreign Bank and Financial Accounts
Income Adjustment and deductions
1. Moving Expenses
2. Itemized deductions
3. Student Loan Interest Deductions
Income Adjustments -- Retirement Plans
1. Trad IRA and Roth IRA
2. Elective Deferrals 401(k) Plans
Status of Your Tax Refund
1. When will I get my tax refund?
U.S. Gift tax and Inheritance Tax
1. The U.S. Gift Tax
2. Tax on Inheritances
Sale of Your Home
1. Profit from the Sale of Your Home
2008 Economics Stimulus Act
1. Are You Eligible for 2008 Stimulus Tax Rebate Payment?
2. 2008 Economics Stimulus Act -- Benefits to Businesses
Tax for Aliens
1. U.S. Tax Filing Requirements for Non-Residents
2. Substantial Presence Test
3. Social Security and Medicare (FICA) Taxes for Non-resident Exempt Individual
4. U.S. Tax Treaties for Professors, Teachers and Researchers
5. U.S. Tax Treaties for Students and Apprentices
6. Mandatory Reporting of Foreign Bank and Financial Accounts
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