Moving & Tax Deductions

time-481450_1280It’s tax time, and if you moved in 2014 for work purposes, you may be eligible to deduct moving expenses on your federal tax return. Before you read these guidelines be aware I am not an accountant. The purpose of this blog is to help people who have moved recently be mindful of deductions that may be available to them.
To qualify for moving expense deductions, you must meet three requirements:
1. You must move close to the start date of your job. Generally, within one year of reporting to work at a new location is acceptable.
2. You must pass the distance test.
a. Your new job must be at least 50 miles further from your old home than your old job location was.
i. For example, if you drove 8 miles to work, your new job has to be at least 58 miles from your old home to pass the test.
3. You must pass the time test.
a. If you are an employee you must work full-time at least 39 weeks during the first 12 months immediately following your relocation.
b. If you are self-employed, you must work full-time at least 39 weeks during the first 12 months, and a total of at least 78 weeks during the first 24 months after your arrival.
c. If your tax return is due before you’ve met this requirement you may still take the allowable deductions if you expect to meet the requirement.
d. Some of the exceptions to this requirement are involuntary separation, death or disability.
Now that you’ve met the three requirements, you may deduct the cost of packing and transporting your household and personal goods.
If you drove your car, and saved all receipts for gas and oil, you may deduct that amount. Otherwise you can take the standard deduction of 23.5 cents per mile driven. Be sure to include tolls and parking fees.
You may deduct the cost of storing goods within any 30 consecutive days after moving out of your old home and before moving into the new one.
A few more deductions – lodging (meals cannot be included), any cost associated with connecting and disconnecting utilities, shipping your car, and shipping pets.
I am not an accountant and strongly suggest you do further research if you are filing your tax return yourself. If you need help, contact an accountant. An accounting firm Welcome Home works with is:
Ciaccio Accounting
232 S. Batavia Ave., Suite B
Batavia, IL 60510
630-240-6826 (more…)