Can I Deduct My Summer-Time Moving Expenses?

I know firsthand that moving stinks.  During the mid-1990s, I moved five times in four years.

It slowed down for a while, but we still managed to move our family three times in two years between 2010 and 2012.

Whether you move 600 miles or 600 feet, the packing, lifting, carrying, unpacking, truck renting, setting up, cancelling, and moving utilities adds up to be as much fun as a week of dental extractions.

Not only that, moving isn’t cheap either.  Between gasoline, packing materials, moving assistance, and insurance, the costs can really add up.

Often, you have to come up with closing costs or security deposits at the same time as the move.

All of this might get you thinking, “Are any of my summer-time moving expenses tax deductible?”

Quite Possibly.

Who Can Deduct Moving Expenses?

To deduct your moving expenses, your move must be related to starting a new job, relocating or seeking work in a new city.

As a result, a move to your retirement home (unless you are working in retirement) is never tax deductible.

Neither is a move to college.  In order to deduct your moving expense, you must work after you move. In fact, you must work full-time for at least 39 out of the first year following your move.

That means that you can move to a new location and look for work, but you’ll need to land your new job and start work within three months.

If you are self-employed, the period is two years, during which you have to work at least 78 weeks.

Helpful hint: The worked weeks don’t have to be consecutive or even with the same employer.

But wait – there’s more.  In addition to working once you move, you must also move “far enough.”  How far is “far enough?”

Your new job must be at least 50 miles farther from your old house than the distance between your old house and your old job.

Please note, if you are a member of the armed forces and your move was due to a military order and permanent change of station, you do not have to satisfy the distance or time test.

What Kind of Moving Expenses Can I Deduct?

You can only deduct the cost to move you and the cost to move your stuff.

In practice, that means you can deduct the cost to pack and ship your possessions, but not the cost of new decorations that go much better in the new place.

You can deduct the cost of moving to your home but not any of the earlier trips you took while you were looking for a place to live.

If you fly, you can deduct your plane fare; if you drive, you can deduct your actual cost (e.g., gasoline and oil) or 23.5 cents a mile.

If you have to put your possessions in storage, up to 30 days of that cost, including insurance, is deductible.  Beyond that, you’re on your own.

If your employer adds the moving expense reimbursement to your salary, then you have to claim the expenses on your tax return to get your deduction.

And if your boss paid for some costs that the IRS doesn’t allow and includes those in your income, you’ll have to pay tax on those reimbursements.

How Do I Deduct My Moving Expenses?

One of the great benefits about moving expenses is that they are not an itemized deduction.

So, even if you have no other deductions, you will still receive a tax benefit (i.e., save money) as a result of your moving expenses.

TurboTax will ask you the necessary questions to help you get your moving expense deduction.

While the moving expense deduction won’t leave you any less physically sore from all that heavy lifting, the tax savings you have to look forward to might lessen some of your financial pain.

Michael Rubin

Author of the bestseller Beyond Paycheck to Paycheck, and the upcoming The Savings Solution, Michael B. Rubin is a Certified Public Accountant (CPA) and a CERTIFIED FINANCIAL PLANNER professional. In addition to his experience providing sophisticated financial advice to affluent clients, Michael has been a key source of information for over a decade to countless others. He speaks passionately about and provides guidance on virtually all personal financial planning topics. Michael has appeared in various media, including radio and TV stations across the country, plus national media such as CNN Money.com, latimes.com, The Wall Street Journal, SmartMoney.com, Chicago Tribune, Financial Advisor Magazine, and Investment News. Prior to founding Total Candor LLC, Michael worked in the personal financial services practices of two of the former "Big Six" accounting firms. Subsequently working for several years as a new venture executive for Toys "R" Us, Inc., he made sure that he never actually grew up. He holds an undergraduate business degree from the Ross School of Business at the University of Michigan and an MBA from the Kellogg School of Management at Northwestern University. Michael lives in New Hampshire with his wife and children.

Leave your comment* = required field