Tax Deductions for Rent Expenses Prior to Moving for a Job Relocation
You can write off the cost of moving for a job on your taxes, provided your new job is far enough away. It has to be at least 50 miles farther from your house than your previous job. If, say, you commute seven miles to work, you can take a moving write-off if your new place of business is at least 57 miles away. This tax deduction includes rent and hotel expenses that aren't reimbursed by your employer.
Rent and Lodging Expenses
If you have to stop and sleep on the way to your new home, you can write off the cost of your motel, You can also write off the cost if you have to rent a place after your former home is no longer livable. The Internal Revenue Service guideline is that one day after you move your furniture, you can take a write-off for, say, a motel or boarding-house stay until you move to the new home. You can write off the full cost provided the IRS consider your rent "reasonable."
If you switched jobs a couple of years ago and you've finally decided to move, you're out of luck on the deduction front. The IRS says you have to move within a year of starting your new job to qualify for the tax write-off. If you can make a case that you had a reason to delay, the IRS may cut you some slack. For example, waiting to move until your son finishes high school can justify a delay.
If you're an employee, you can only deduct moving costs if you work full-time for at least 39 weeks in the 12 months after the move. It doesn't have to be 39 weeks in a row, and it doesn't have to be all for the same employer. If you're self-employed, you have to meet the same time test, and also work 78 weeks over the 24 months after the move. If you fail to meet the test, none of your expenses, including rent, are deductible.
You figure the amount of your deduction using IRS Form 3903. Report the results on the front of Form 1040 as an income adjustment. This lets you write off moving costs even if you don't itemize. Usually you take the deduction the same year you paid the rent and other expenses. If it later turns out you didn't put in enough full-time work weeks, you file a 1040X return to amend your 1040, cancel the deduction and pay the extra tax.
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.