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 If you moved because of a change in your job location or because you started a new job, you may be able to deduct your moving expenses if your move is closely related to the start of work. To qualify for the moving expense deduction, you must meet both the distance and the time tests, unless you are a member of the armed forces and your move was due to a permanent change of station.
More Info:
IRS
– Tax deductions that may be taken for moving
A one-stop source
for all state tax sites
Frequently Asked Questions:
Q: I have two moves in one year. How is this handled?
A: You must complete a separate Form
3903 for each move. Your employer should provide a separate
accounting of expenses for each move.
Q: My employer doesn’t pay for storage of household goods.
Can I deduct these costs?
A: The cost of in-transit storage of
household goods and personal effects is deductible up to
30 consecutive days for domestic moves.
Q: How is it handled if my employer does not calculate
tax gross-up on certain moving expenses?
A: Your employer should withhold a sufficient
amount from your reimbursement check to cover Federal, State,
and Social Security Taxes, Medicare, and local taxes.
Q: Can I still deduct moving expenses if I don’t prepare
an itemized Federal Tax Return?
A: You don’t need to itemize to deduct
moving expenses. Your employer will exclude qualified reimbursements
from your W-2 wages. Any other tax deductible expenses you
had that were not reimbursed can still be deducted. Use
IRS Form 3903 to take applicable deductions.
Q: What forms do I use if I move from the US to another
country?
A: “Tax Guide for
U.S. Citizens and
Resident Aliens Abroad” explains how to calculate your moving
expenses if you are making use of the foreign earned income
exclusion. Tax Form 3903 is used to deduct relocation expenses.
Q: Will I lose some of the value of my itemized deductions
and personal exemptions due to my higher adjusted gross
income when I complete my tax return?
A: This depends upon the level of income
and if your employer’s gross-up policy considers that phase-out
of itemized deductions and exemptions. You’ll need to discuss
this with payroll or HR for more details.
Q: How is it handled if my employer provides a lump-sum
to cover my relocation expenses?
A: Lump-sum payments are considered income
and are included in your wages. If your lump-sum payment
included qualified moving expenses, don’t forget to deduct
your actual, receipted costs when you complete IRS Form
3903.
Q: Can I deduct the cost of travel for my child who attends college in another state?
A: Moving expenses that you pay for yourself and members of your household can be deducted. A member of your household is anyone who has both your former and new home as their home.
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