Is Moving Tax Deductible?

Moving can be a costly venture regardless of the reason.
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Moving can be expensive. The cost of the truck, movers and materials add up quickly. Even if you do the move yourself, it can put a dent in your wallet. Wouldn't it be great if you could at least deduct the cost from your income tax liability? According to the Internal Revenue Service, you can if your move meets certain criteria.

Reasons to Move

You will probably move several times in your life for a variety of reasons. You may buy a new house, or move out of your parents' house. You may be fresh out of college and headed for your first apartment. Getting married typically causes one of you to give up your place of residence and move in with the other. Employment is another reason for moving. You may be transferred to another area of the country and will have to relocate to continue the job.

Moving Expenses

The cost of moving involves more than renting a truck, tossing a few boxes in and hollering "Westward Ho" as you make your way down the pike. Moving expenses also include any required deposits for turning on utilities at the new location, security deposits for your new rental, packing material to protect your belongings in the truck, the fuel to power the truck and the cost to rent the truck.

In addition, if you are moving a significant distance from your old town, you will incur hotel and meal expenses along the way. Some of these expenses are deductible as long as you meet IRS criteria.

When You Can Deduct

According to the Internal Revenue Service, you can deduct your moving costs, as long as your move meets several requirements. Your move has to be because of your job. Whether your current company transfers you or you accept a position elsewhere and must relocate, if the move is prompted by a job opportunity, that is a valid criteria.

The second requirement is that the new job is at least 50 miles plus the old distance from your current location in relation to work. For example, if you currently commute seven miles to work each day, your new job must be at least 56 miles from your house for you to be able to deduct moving expenses.

The final requirement to deduct moving expenses is taking the deduction within a year of starting the new job. If you can prove valid reason for waiting a little longer, up to 18 months, you can still take the deductions. One example of a valid reason for waiting to move would be waiting until the children got out of school.

You are required to work for 39 weeks in the first 12 months following a move. You don't have to work for the same employer, but you must meet the 39-week work schedule to deduct your moving costs on your taxes.

What You Can Deduct

If you feel you meet each of the requirements used to determine deduction eligibility, you can attach Form 3903 to your tax returns and claim the moving expenses.

In 2010, allowable deductions included all expenses related to the truck and moving materials, as well as lodging during travel. Meals are not deductible.

If immediate family members fly to the new location, you are allowed to deduct the cost of plane tickets. If you hire a moving company to handle the move, the cost of that moving company is also deductible.

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