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All three of the following must be applicable for your moving expenses to be deductible on your tax return.
1. Must relate to start of work
Your moving expenses must have occurred within one year of your first day at work in that new location.
2. Distance Test
Your new main job location must be at least 50 miles farther from your former home than your old main job location was from your former home. For example, if your old main job location was 10 miles from your former home, your new main job location must be at least 60 miles from that former home.
3. Time Test
You must work full time for at least 39 weeks during the first 12 months after moving to your new location. You do not have to work for the same employer for those 39 weeks and they do not have to be consecutive worked weeks. If you haven’t met this test by the time your tax return is due, you can deduct the expenses if you reasonably expect to meet the 39-week test within 12 months even if it occurs during the following tax year.
As with most tax deductible items there are exceptions to the rules and adjustments to each of the three requirements. For instance, military personal are exempt from distance test and time test. Also, the moving expenses must be related to a member of your household.
Lastly, the expenses must be “reasonable” for your move. In other words, you can’t deduct your 3-day Hawaii vacation in route to your move from Texas to California!
If you have questions on the deductibility of your moving expenses, don’t hesitate to contact us...we’re here to help!