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Moving Expense Deduction Tips

As difficult and as inconvenient as it can be to move to a new town, perhaps the part that bites the most is that you had to pay for it. If you happen to be moving for a new job though, you'll be able to recoup some of that money. The IRS offers you a moving expense deduction if you relocate for a job. All you need to do is to put it down on Form 3903.

The IRS of course doesn't just give your moving expense deduction up just like that. They have strict rules for what qualifies. The first rule is that you can't call it relocating unless the new job requires you to travel at least 50 miles farther than your old job requires you to travel. That means that if your old job was in Manhattan and your new job is in Brooklyn, you don't get a moving expense deduction when you pick up stakes and move from Manhattan to Brooklyn.

But there's an exception to this. If you are in the military, and you've been transferred to a new station, it doesn't have to be 50 miles away.

The new job also has to be a full-time one. And once you take up the new job, you have to stay on it for at least 39 weeks. You can't move to be close to the new job and then give it up after a couple of months because you don't like it anymore. If you do, you can't claim a moving expense deduction anymore.

But let's get to the good stuff – the kinds of expenses you can claim as deductions on your tax form. The expenses involved actually traveling to the new place – driving there, staying at a motel on the way – you can deduct all of these. You can't though, deduct the cost of restaurant meals on the way. If you are taking a plane or something, you could deduct the cost of your ticket as well.

As for moving your stuff, all the moving costs of hiring a truck, paying the movers, paying for all the packing material – all of these are deductible. You can even deduct storage and insurance costs.

Now here's the tricky little question – what do you do if your employer gives you moving assistance? Well, the IRS will not be pleased to see collecting both from them and from your employer. So whatever assistance they are giving you, you need to tell the IRS about it. You need to claim on your tax form, only what your employer's contribution does not cover.

 


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