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Health & Fitness

Are You Moving This Summer For Work? Know, Your Tax Deductions!

If you plan on making a work-related move this summer, you may be able to deduct the costs of the move. This may be true if you move to begin a new job or to work at the same job but in a different job location. The IRS offers the following tips on moving expenses you may be able to deduct on your tax return.

There are three requirements to meet, in order to deduct moving expenses:

    1. Your move closely relates to the start of work.  Generally, you can consider moving expenses within one year of the date you first report to work at a new job location. Additional rules apply to this requirement. 
    2. You must meet the distance test.  Your new main job location must be at least 50 miles farther from your former home than your previous main job location was. For example, if your old main job location was three miles from your former home, your new main job location must be at least 53 miles from that former home.
    3.  You must meet the time test.  After you move, you must work full time at your new job location for at least 39 weeks during the first year. Self-employed individuals must meet this test and also work full time for a total of at least 78 weeks during the first 24 months upon arriving in the general area of their new job location. If your income tax return is due before you have satisfied this requirement, you can still deduct your allowable moving expenses if you expect to meet the time test.

    See Publication 521, Moving Expenses, for more information about these rules. If you can claim this deduction, here are a few more tips:

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      • Travel-  You can deduct transportation and lodging expenses for yourself and members of your household while moving from your former home to your new home.  The cost of meals during the travel cannot be deducted.
        • Household goods-  The cost of packing, crating and transporting your household goods and personal property can all be deducted. You may be able to include the cost of storing and insuring these items while in transit.
          • Utilities -  The costs of connecting or disconnecting utilities is deductible.
            • Nondeductible expenses- You cannot deduct as moving expenses any part of the purchase price of your new home, the costs of buying or selling a home, or the cost of entering into or breaking a lease. See Publication 521 for a complete list.
              • Reimbursed expenses-  If your employer reimburses you for the costs of a move for which you took a deduction, you may have to include the reimbursement as income on your tax return.
              • Update your address -  Be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive mail from the IRS. File Form 8822, Change of Address, to notify the IRS.
              • Tax form to file.  To figure the amount of your deduction for moving expenses, use Form 3903, Moving Expenses.

               If you have any questions, please contact PerformAccount at 908-541-0101 or email us at support@performaccount.com

              PerformAccount, powered by New Jersey based Bookkeepers 2 Go, offers full-service back office outsourcing and compliance solutions for small and medium businesses.

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