How to Figure Out if Your Move is Tax Deductible
July 15, 2016
Moving can get expensive, so it’s nice to know that it could be tax deductible. Although we are not accountants – we can offer you two tests to determine if your moving expenses may be eligible. You must qualify for both tests in order to qualify for a tax deduction.
Test 1: “The Distance Test”
If your new job is at least 50 miles further from your old home than your old job location was to your old home – you qualify. So, for instance, if you used to drive 30 miles to work from your old home – then distance from your new job must be at least 80 miles from your old home to qualify in this category.
Test 2: “The Time Test”
If you’re an employee, you must work for at least 39 weeks during the first 12 months after you move to your new home. If you’re self-employed, you must comply with the above – plus, work full-time for a total of at least 78 weeks during the first 24 months, after you arrive in your new work location.
The Exceptions:
There are some exceptions to not meeting “The Time Test” – for instance if death, disability or involuntary separation occurs, you should talk to your accountant to see if you may be exempt from meeting the time rules. Also, if you’re a member of the armed forces and your move was made because of a permanent change of station location, you do not have to satisfy the distance or time test.
Again, if you have specific questions – please call your CPA and they will help you navigate through your tax deduction.
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