Proving Moving Deductions on Taxes

The Internal Revenue Service allows taxpayers to deduct certain moving expenses if the move is work-related. The first step is to verify the move qualifies under IRS guidelines, which you can do while completing Form 3903. The agency requires you to include this form with your tax return. Although the IRS does not require you to submit documentation of your moving expenses when you file, it is advisable to keep supporting records to prove your deduction, should any taxing agency question the deduction.

Distance Test

For your move to qualify for the deduction, the distance between your new job and your old home must exceed 50 miles plus the distance between your old place of business and your former residence. For example, if your former workplace was 21 miles from your former residence, your new job must be at least 71 miles from your old home. If you are moving for your first job or accepting a full-time position after having been unemployed or employed part-time for an extended period, the distance between your prior residence and your work address must be 50 miles or more. An easy method to prove your move satisfies the distance requirement is to go to an online mapping site. Enter the addresses for your old home and old job and let the software calculate the mileage; print the page for your records. Repeat the process, using the addresses for your old home and new job, and print this page.

Time Test

You must incur your moving expenses within 12 months of your first work day in the new location. You must also meet a time test for remaining in the new location. The time test depends on whether you are self-employed or are an employee. If you are an employee, you must be a full-time worker for at least 39 weeks of the first 52 weeks after your arrival at your new home. If you are self-employed, you must also meet the 78-week test. This requires you to work, or expect to work, at least 78 weeks during the first two years after your arrival at your new home. Proving you meet the time test depends on what is available to you. Typically, if you can prove employment or income, you can prove you pass the time test. Pay stubs, forms W-2 and 1099, employment-offer letters, contracts, invoices you submit to clients, and copies of checks received from clients are possible sources of proof.

Moving and Storage

You can deduct the cost of moving your possessions, whether you hire a professional mover or do it yourself. Keep copies of invoices or quotes from the moving company, contracts and invoices for rental trucks, and receipts for the rent paid for storing your goods. Storage is limited to the 30-day period between the start of the move and delivery of the items to your new home. Retain your canceled checks or credit card statements to prove your expenses.

Travel

You cannot deduct meals while you are moving to your new home. However, you can deduct lodging; tolls; parking fees; and the cost of airline, train or bus tickets. If you own the car you travel in, you can deduct actual mileage at the rate in effect for the year of your tax return. For example, the rate for moves was 23.5 cents per mile between July 1 and Dec. 31, 2011. You must use the mileage that represents the most direct route between your old and new homes. Alternatively, you can deduct your actual costs for oil and gasoline. If you do not own the vehicle, you must use the actual expenses, rather than the standard mileage rate. Keep copies of receipts and your canceled checks or credit card statements to prove your costs.

Diary

You may have some minor expenses for which you do not have receipts. For example, you might have to pay a toll at an unmanned booth. Typically, the IRS will accept a diary or log of such expenses as long as you record the entries in a timely manner. Enter the amount, date and location. If the reason for the expense is not evident, enter the reason as well.