We do what it takes for the job, right? Even if it means changing locations. If you’ve recently moved as a result of a change in your job or business location, you may qualify to deduct a reasonable amount of moving expense. You cannot deduct meal expenses, but other moving costs may be deducted if you meet three qualifications:
- Your moving date is close to the start date of the new job/location.
- You pass the distance test.
- You pass the time test.
Close Start Date
Your move has to be close to the day you start work at your new location. Generally, the term “close” is defined as any move within one year from your first day of work. The distance between your new job and home cannot exceed the distance between your former residence and your new location.
Distance Test
The new location must be at least 50 miles farther from your old home than the previous workplace. If you didn’t have a workplace prior to this move, your new workplace must be greater than 50 miles from your old home
Time Test
You are required to work full-time hours for 39 weeks during the first 12 months after your move. Those who are self-employed must work full-time hours for 39 weeks during the first 12 months, AND amass a total workload of 78 weeks in the first 2 years following your arrival in the new area. There are a few exceptions to the time test, which include death, disability and involuntary separation.
Military personnel who move as a direct order or permanent station relocation are not required to meet the time test rules.
Moving expenses are calculated on Form 3903, Moving Expenses, and are deducted as an income adjustment on your Form 1040 when filing your taxes. Deductions apply to non-reimbursed expenses only.
