Potential Tax Breaks When MovingSeptember 3rd, 2015
Unexpected expenses have a bad habit of popping up during a move. Whether it’s a last-minute repair to the old house, a flat tire on the trip to the new one or an unpredicted night at a hotel, many of these are simply par for the course with a process as involved as moving to a new home. When combined with the costs you have the ability to predict – such as inspections, packing materials and moving van lines – this can take quite a toll on your bank account.
However, with a little diligence and some sound financial advice, there are actually a few ways to save money during relocation, especially if you are moving for a new job. The government provides many tax breaks for people who are moving, and keeping track of them and seeing which apply to your circumstances can end up saving you hundreds or even thousands of dollars in April.
Here are several moving-related tax breaks you can receive.
If you are moving to be closer to a new job, you may be eligible for some serious tax breaks. In general, if your new job is at least 50 miles further from your previous home than your old job, you can receive reimbursements for many of your moving expenses. Known as the 50-mile distance test, this caveat is used to ensure that people who truly move for a new job get the assistance they need to smooth the transition. This provision can help people moving out of state in search of a more favorable local economy.
Like the distance test, there is a certain baseline of time you must have spent at a new job during a tax-year to be eligible for reimbursements. If you work full-time for an employer near your destination for 39 of the 52 weeks following your move, you can receive tax breaks.
Now that you know what allows you to qualify for some tax breaks, what are some moving-related expenses that can be deducted? Luckily, there are quite a few.
Costs associated with getting to your new home may represent the largest source of potential deductions. You are allowed to tally the expenses involved with moving, including vehicle mileage, lodging, parking fees, road tolls and airfare. Dining expenses are not eligible, however.
You are also eligible for deductions related to your personal belongings and household goods, which can include the costs of packing supplies and their transportation as well as pets or shipping vehicles. In some cases, this can be used to help you cover the costs of hiring a professional household moving company.