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Can You Claim Hefty Deductions For Moving Because of Your Job?
Posted in Home Business
We are a mobile society these days. This is primarily due to the fact that our employment prospects require us to move from here to there. While moving is no fun, there can be a silver lining in the form of tax deductions.
The mere mention of the word moving sends a chill down my spine. It is my least favorite thing to do without a doubt. This is probably because I end up doing it more and more as do most of you for employment reasons.
It used to be that you could take a job with a company and count on staying there for thirty or forty years. Those days are long gone as we all know. From downsizing to salary concerns, we all move because of employment reasons.
This change in society has not gone unnoticed by the government. In a shocking move, the powers that be have actually created tax dedutions for people who incur expenses moving to a new job. Well, at least most of them.
Since we are talking taxes, nothing can be straightforward. Yep, you have to pass a few tests before claiming moving deductions. First up, your new job must be 50 miles more from your first home than your new place of employment. Confused?
A practical example will work. Assume my last job was 7 miles from my home. My new one is 67. I have passed the test. If the new one was only 27 miles, I could not. Yes, it is a strange test, but it is par for the course when talking about the IRS and taxes.
One test is never enought with taxes. You must also pass a time test that requires you to be employed full time in your new position for a miniimum of 39 weeks out fo the 48 immediately following your move.
Oddly, the IRS also allows deductions to be claimed by the self-employed if you meet the above requirements. The time test is expanded, however, in that you have to work 78 weeks in the first 96 weeks.
There will be a natural temptation to claim moving deductions, particularly if you are close to passing the tests. Don’t. The IRS closely watches how taxpayers claim new tax deductions, so you don’t want to get audited.
Given all this work, are the moving deductions worth it? Well, they can be. It depends on what you incur as costs. You can deduct all reasonable expenses such as truck rentals and travel costs from your old home to the new one.
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