Rules For Deducting Moving Expenses on Your Tax Return

Sorry about the lack of posts, I have a hard time writing about taxes in the middle of summer.

Here are the rules for deducting moving expenses. This can be a complicated subject, and this post will aim to simplify the IRS tax code.

You can deduct your moving expenses provided all of the following apply:
Your move is closely related to the start of work at a new location
You must meet the Distance Test
You must meet the Time Test

If you are a member of the Armed Forces, different rules apply to you, which I will cover later.

The Distance Test: Your move meets the Distance Test if your new main job location is at least 50 miles away from your former home than your old main job location was from your former home. For example, if your old main job location was 5 miles from your former home, your new main job location must be at least 55 miles from your former home.

The distance between your job location and your home is the shortest of the most commonly traveled routes. Also, only the location of your former home and new job location are considered, and does not take into account the location of your new home.

Your main job location is usually the place where you do most of your work. If there is no one place where you spend most of your working time, such as you work in construction and go to different job sites, then your main job location is where your work is based, usually your company's office. If you work for several employers on a short term basis and you get work under a union hall system, then the main job location is the union hall.

Time Test: There are 2 Time Tests, one for employees and one for self-employed people.

If you are an employee, you must work full time for at least 39 weeks during the first 12 months after arriving in the area of your new work location. You count only the work you do as an employee, not the work you do as self-employed. You do not have to work for the same employer all 39 weeks, nor do you have to work 39 weeks in a row. You must work full time within the same commuting area for the entire 39 weeks.

You are considered to work full time if are temporarily absent from work for reasons like illness, natural disasters, strikes, layoffs, or lockouts. Time spent on vacation from your job is also included.

For people who are self-employed must work 39 weeks in the first 12 month period and for at least 78 weeks during the first 24 months after you arrive at your new job location. You count any full time work done as an employee or as self-employed. You do not have to work for the same employer all 78 weeks, nor do you have to work 39 weeks in a row. You must work full time within the same commuting area for the entire 78 weeks. You are not considered self-employed if you are semi-retired, a part-time student, or if you only work a few hours each week.

If you are married and file a joint return and both you and your spouse work full time, either of you can meet the full time work requirement. However, you cannot combine your weeks to meet the 39 week rule.

If you move this year, you can deduct your expenses on your 2007 return even if you have not met the Time Test by the time your return is due. You can only do this if you expect to meet the 39 week rule.

The Armed Forces: If you are in the service, you do not have to meet the Time Test because of a permanent change of station. If you are on active duty and move because of a permanent change of station, you do not have to meet the Time or Distance Test, and you can deduct your unreimbursed moving expenses.


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Tim Watson is a tax preparer during the season who also runs an SEO directory and an iPod directory. You may use this article as is provided the resource box stays intact.