Americans like to move and often move several states away from home. This happens even more frequently now that quality jobs are harder to find. Like many people, you may have moved last year to start a new job. If you did, you may qualify to deduct any moving expenses your employer does not reimburse on your taxes this year. However, there are a few requirements you must meet to be eligible to deduct moving expenses.
Time
There are different rules related to time for employees and those who are self-employed.
Employees–According to the IRS, to be able to claim your moving costs, you must have worked full-time for 39 weeks within the first 12 months of your move. These 39 weeks do not have to be consecutive, and you do not have to be employed by the same employer during this time. There are exceptions to this rule including death, disability and involuntary separation.
Self-Employed—If you are self-employed, you must work full-time for 39 weeks during the first 12 months AND 78 weeks for the first 24 months. You can count work that you do both as an employee and a self-employed person. You do not have to work for the same employer or in the same trade or business for the full 78 weeks.
For both employed and self-employed people, there are a few other details. If you take a vacation or do not work due to a strike, natural disaster, layoff or illness, you can still count those weeks as part of your full-time work requirements. If you are a seasonal employee who works for 8 months and then you do not work for 4 months due to the off season, you can count the entire year as time you worked.
Distance
If you did not previously hold a job, your new job must be at least 50 miles away from your old home.
If you were previously employed, your new job must be 50 miles further from your old home than your old job was. So, if you lived 15 miles from your previous place of employment, your new job must be 65 miles away from your old home.
Military
If you are in the military and you moved due to a military order or for a permanent base change, you do not need to meet the time and distance tests.
When To Claim Your Deduction
Even if you have not met all of the weeks required for the time test, you can still deduct your moving expenses if you intend to meet the time requirement. Alternatively, you can wait until you have met the time requirement and then file an amended return.
If you have moved for a new job or your first job and you satisfy both the time and distance requirements, you should be able to deduct your expenses for the move when you file your taxes. For further information, look at IRS Publication 521.
