Adjusted Gross Income Cut-offs for Deducting Moving Expenses
If you move because your new job involves a substantial commute, you may get a tax write-off. If you meet the IRS tests to qualify for the moving-expense deduction, you can take it without itemizing. Instead, you report it on your 1040 as one of the adjustments to your gross income.
You can't take the write-off unless your commute from your old home to your new job is 50 miles longer than with your previous job. If, say, you drive three miles to work, then switch to a new job 45 miles away, moving closer to work may make life easier, but it isn't tax deductible. If you've been working at home or you've been out of the workforce entirely, the new job has to be at least 50 miles from your old home.
You don't have to have a job already lined up to get the write-off. Instead, you can qualify if you move, then find work, or move for one job, then take a different one. What counts is how much time you spend working after the move. For example, if you're an employee, you need to spend 39 weeks of the 12 months after the move working full-time to take the deduction. The IRS makes allowances for unemployment due to seasonal work and illness.
If you already landed work 50 miles or more away, you can't wait forever to make the move. You have to move to your new home within a year of starting work at the new location to qualify for the write-off. The IRS makes exceptions for some cases, such as delaying so your kids can graduate from their old high school. Another restriction is that your new commute must be less than your old commute was.
Unlike many deductions, you don't lose the write-off if you have a high AGI. If you meet the IRS tests, you report the expense on Form 3903, then on your 1040. The only AGI restriction is the one you have on all your personal expenses. If your AGI comes up less than zero and it's all personal, rather than business expenses, you can't usually claim a loss on taxes. Instead, you just report zero.
A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.