Don't Move Without Us!

You’re looking for a new challenge at the workplace, and your current position and company don’t have much to offer.  Or maybe someone told you about an opening at another business in a different city (or state).  Or you’ve been offered the same job by your company – but in a different area. 

However it happened, the “wanderlust” is upon you.  You mail resumes, complete interviews and are offered two positions.  But wait, both jobs are so far away that it doesn’t really make financial sense to commute.  

Could it pay for you to move?  Maybe.  The IRS allows you to deduct many expenses of moving to a new locale to take a new job (or even to take the same job in the same company, but at a different location!).  You’ll need to meet a few tests to see if you qualify for these deductions.  Here’s how it works: 

TIME - If you start a new job in a new location, you’ll need to move to your permanent residence within one year of starting the position. 

DISTANCE - This one’s a little tricky.  It starts with your FORMER residence.  If you worked 7 miles from your old home, then your new “office” must be 57 miles from your old home.  That’s right, from your OLD home… 

MORE TIME - This is the amount of time you actually work in the new area.   You have to work for 39 weeks of the first 12 months after your arrival at your new home.  AND you have to work a total of 78 weeks during the first two years.  This does not mean that you have to wait two years to claim your moving expenses. It does mean that if you leave the area, you’ll have to “pay back” the deductions to Uncle Sam. 

So, what’s deductible? 

• Transportation of persons and goods, using the shortest, most direct route between the two locations (in other words, you can’t go from Baltimore, MD to Charlottesville, VA via Tampa, FL)
• Actual gas/oil for the trip, OR the standard mileage rate.
• Parking and tolls for the trip (keep your receipts!)
• Packing, crating and transporting goods to your new home
• Connection/disconnection of your utilities
• Lodging during the move (if you move cross-country and drive to get there, you can deduct motel stays for you and your family) 

What if your employer pays for a portion of your moving expenses?  If that’s the case, the reimbursement will be shown in box 12 of your W2. 

Where to report all of this?  On Form 3903.  Of course, if you are fed up with unpacking boxes, and don't want to deal with IRS Forms, we would be happy to help you figure out how to maximize the Moving Expense.  Just visit any PRO-TAX office. 

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