An individual taxpayer is allowed to deduct from their taxable income any moving expenses paid or incurred in connection with the commencement of work by the taxpayer as an employee or as a self-employed individual at a new principal place of business. Moving expenses are recorded on Form 3903 and entered on line for the Form 1040.
If you moved because your job or business moved to another location or because you started a new job that was in a new location, or because you started a new job or business, you may be able to deduct your some of your moving expenses from your taxes. You can deduct your moving expenses if you meet all three of the requirements:
If you want to deduct moving expenses on your tax returns because it was work or job related, there are several deductions you can make in relation to the move. Deductible moving expenses are reasonable expenses that are incurred to:
There is no set dollar limitation on how much is deductible, but the amount must be reasonable.
Commencement of work may be:
Usually, the moving expenses must be connected to the commencement of work in time and location in order to be deductible. Typically, moving expenses incurred within 1 year of the commencement of work. If your employer does reimburse your expenses, you must claim the money as income on that year's tax return.
In terms of location, the new home that the taxpayer decides to move into should be physically closer to the new place of work than the old home. An exception to this is if:
For the move, you must relocate within one year of the time you first report to work at your new job location. You must also meet the minimum distance and the minimum employment tests in order to deduct moving expenses:
For the purposes of the moving expense deduction, a self-employed individual is one who performs services as:
Determining what moving expenses can be deducted from your taxes can be complicated. Although there are various tax preparation software on the market that can help you with your tax problems, they cannot provide the same level of service that a tax lawyer can. If you are unsure about your taxes or you need someone to represent you before the IRS, a tax attorney can help you.
Last Modified: 06-19-2018 07:26 PM PDTLaw Library Disclaimer
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