How to Qualify for the Moving Expense Deduction on My Tax Refund

If you move to a new area for your employment, you might be able to deduct your expenses on your income taxes.

Real Estate image by Stephen VanHorn from Fotolia.com

The Internal Revenue Service allows you to deduct a portion of your job-related moving expenses that your employer did not cover. To be eligible to claim moving expenses, you must pass three tests related to place, distance and time. If your move meets all of the requirements, you can claim the moving expense deduction, which reduces the amount of your taxable income.

Closely Related In Place Test

According to the IRS, if the distance between your new home and new place of employment is not more than the distance between your old home and new place of employment, your new home meets the place test. If your employer requires you to live at your new home as a condition of employment, the closely related test does not apply. Also, if commuting between your new home and new place of employment is less costly or less time-consuming than commuting between your old house and your old place of employment, you can disregard the closely related in place test.

Closely Related In Time Test

To claim these expenses as a deduction, you must have moved within one year from your first day of work at your new job. Generally, you cannot deduct expenses that occurred outside of the year, but if you experienced circumstances that prevented you from moving during the one-year timeframe, the IRS might make an exception.

Distance Test

The distance between your new job and old home must be at least 50 miles further than the distance between your old home and old job, as of 2012. For example, if the distance from your old home to your old job was 25 miles, the distance between your old home and your new job must exceed 75 miles. Some exceptions apply to military and retired taxpayers. For more information on the current distance requirements and exceptions, refer to Publication 521.

Time Test

You must work full-time for at least 39 weeks of the first 12 months after your move to qualify. The IRS does not require that you work 39 weeks consecutively nor are you required to work for the same employer. Self-employment is included in the 39-week rule, but the taxpayer must work for at least two years, or 78 weeks out of the first two years. Both self-employment and full-time employment can be included in the 78 weeks. Full-time employment depends on what is typical for your work in your area and you must work within the same general commuting area.

Eligible Expenses

The IRS allows you to claim the expenses that are logical for the circumstances of the move. You can include the cost of packing and transporting your belongs, connecting or disconnecting utilities to move your items, shipping your pets or vehicles, storage, and travel. You can only claim the cost to travel between your old home to your new home using the shortest route by means of conventional transportation. This also includes lodging for you and members of your household, but not meals. If you make an alternative stop that is not within a direct route to your new home, you cannot claim the expenses for the additional mileage. If you travel by car, you can claim the standard mileage rate, which was 23 cents per mile as of 2012.

Photo Credits

  • Real Estate image by Stephen VanHorn from Fotolia.com

About the Author

Angela M. Wheeland specializes in topics related to taxation, technology, gaming and criminal law. She has contributed to several websites and serves as the lead content editor for a construction-related website. Wheeland holds an Associate of Arts in accounting and criminal justice. She has owned and operated her own income tax-preparation business since 2006.

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