What to Know About Work-Related Tax-Deductible Moving Expenses
If you're about to relocate for work-related reasons, here's some good news for you. Yes, there are tax-deductible expenses related to your move that you may not know about.
When you move, you can deduct these expenses from your overall tax and pay less than you ordinarily would have! In this piece, we'll highlight some of these taxes and the process of claiming them on your return. Read on!
What moving-related expenses are tax deductible?
Here are some of the linked expenses:
Travel from your old house to the new one.
Security deposits and insurance
Utility connection fees
Some rental expenditure
If you're relocating as a result of a job change, there are also some tax-deductible expenses involved, such as the cost of interviews, applications and resumes. Ensure that you keep all relevant receipts so you can make an efficient claim when you get back.
How do I qualify for tax deduction?
You must meet some requirements before you can claim moving expenses on your taxes.
Your old home to the new workplace must be a minimum of 50 miles further than the equivalent distance between your old home and your old workplace.
For married folk, only one of either has to meet the distance test to qualify for the tax deductible. Ensure that you speak to your tax advisor to know exactly when you qualify for a tax-deductible. It can save you a lot of dollars.
You have to be employed full time in the new neighborhood for at least 39 weeks in the first year after your move. Multiple jobs are also inclusive here.
For self-employed folk, the requirements are that you must have worked for at least 78 weeks throughout the first two years after the move. Additionally, you'll have to have worked at least 39 weeks within the first year. Similar to the distance test, if you're married, only one if you and your spouse are required to meet the conditions.
There are certain exceptions to the time test, such as when you don't start working immediately after arriving, being a member of the armed forces, and if you have health issues that lead to the termination of your employment.
What moving costs are not tax-deductible?
It's essential that you understand exactly what is tax-deductible, and what isn't. With moving, there are several elements that are tax-deductible. However, you may not be aware that some situations and expenditures do not count. They include:
Security deposits are exceptions.
If you lose a club membership upon relocating.
The cost of selling or buying a home, or real estate agent fees
If your previous employer has already reimbursed you for some moving expenses.
So, before you relocate for work, ensure that you know exactly what counts and what doesn't regarding tax-deductible expenses. This saves you a lot of cost in the long run.
Of course, when you do decide to move, you won't be able to do it alone. That's where Klatt Moving and Storage comes in. We're professional experts that help you when packing and relocating. Request a free quote to get started.