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Can I Deduct My Moving Expenses?

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.

Which Moving Expenses Are Deductible?

Deductible moving expenses are reasonable expenses that are incurred to:

  • Move household and personal items from your old home to your new home, and
  • Travel (including lodging) from your old home to your new home.

Meals, pre-move house-hunting expenses, other temporary living expenses, and closing costs from selling the old house and buying the new house are not deductible moving expenses.

There is no set dollar limitation on how much is deductible, but the amount must be reasonable.

What Does "Commencement Of Work" Mean?

Commencement of work may be:

  • The beginning of work by the taxpayer for the very first time or after a long period of unemployment;
  • The beginning of work for a new employer or the start of new business in a new location; or
  • The beginning of work for the same employer or business but in a new geographical location.

How Can I Connect My Expenses with My Work?

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 are deemed to be connected.

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:

  • There is a requirement as a condition for the taxpayer's employer that he/she lives in the new home, even though it is further away than the taxpayer's old home, and
  • The taxpayer actually saves time in commuting to work even though the new home is farther way than the old home.

Are There Any Additional Requirements?

Yes. The taxpayer must meet the minimum distance and the minimum employment tests in order to deduct his/her moving expenses.

Minimum Distance Test

The taxpayer's new principal place of business must be at least 50 miles farther away from the taxpayer's old home than the old place of work was.

Minimum Employment Test

For an employee, he must work at least 39 weeks as a full-time employee in the 12 months following his arrival in the new place of work.

For a self-employed individual, he must work a total of 78 weeks as a self-employed individual in the 24 months following his arrival in the new place of work, with at least 39 weeks being worked in the first 12 months.

Who Is a Self-Employed Individual?

For the purposes of the moving expense deduction, a self-employed individual is one who performs services as:

  • An owner of an entire interest in an unincorporated business; or
  • A partner in a partnership carrying a business.

Do I Need an Attorney to Help Me with My Tax Problems?

Although there are various tax preparation softwares 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.

Photo of page author Kristen Johnson

, LegalMatch Legal Writer

Last Modified: 10-21-2014 03:36 PM PDT

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