Moving Expenses

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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 the distance and the time tests.

Your move will meet the distance test if your new main job location is at least 50 miles farther from your former home than your old main job location was. Use the shortest distance of the most commonly traveled routes between these points. To determine this, first figure the distance between your former residence and your new job and then subtract the distance between your former residence and your old job. If the result is 50 miles or more, you have met the distance test. For example, if the distance from your former residence to your new job is 70 miles and the distance from your former residence to your old job is 5 miles, you will meet the distance test. If you are a member of the armed forces and your move was due to a permanent change of station, you do not have to meet the distance test.

The second test concerns time. If you are an employee, you must work full-time for at least 39 weeks during the 12 months right after you move. If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you move. If you haven't met the time test by the date your 2004 tax return is due, you may still deduct your moving expenses on your 2004 return as long as you expect to meet the time test. Then, if you don't meet the test, you must either:
  1. Amend your 2004 return; or
  2. Report the amount you deducted on your 2004 return as income on your 2005 return if you had expected to meet the 39-week test, or on your 2006 return if you had expected to meet the 78-week test.
If you are married and are filing a joint return, only one spouse must meet the time test. You cannot, however, add the weeks your spouse worked to those you worked to satisfy the test. In general, you do not have to meet the time test if:
  1. You are in the armed forces on active duty and your move was due to a permanent change of station, or
  2. Your job at the new location ends because of death, disability, a transfer for your employer's benefit, or a layoff other than for willful misconduct; or
  3. You moved from outside of the United States to the United States because you retired, or you are the surviving spouse or dependent of a person who died while living and working outside the United States, and your move begins within 6 months of that person's death.

If you meet the requirements, you can deduct the reasonable expenses of moving your household goods and personal effects to your new home. You can also deduct the expenses of traveling to your new home, including your lodging expenses. You cannot, however, deduct meals.

Moving expenses are figured on Form 3903 (PDF) and deducted as an adjustment to income on Form 1040 (PDF). You cannot deduct any moving expenses that were reimbursed by your employer.

For additional information, refer to theForm 3903 (PDF) Instructions and Publication 521, Moving Expenses.

Source: IRS.gov

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