Moving? Get a Break from Uncle Sam

If the thought of hiring a national moving company has you on edge because of all your other move-related expenses it may make you feel better to learn that Uncle Sam might be willing to help you a little. Despite the fact that you probably swear under your breath at him when you get your paycheck every week, your dear Uncle Sam can actually be quite generous to certain movers.

Who is Eligible?

To get a tax break on the cost of your national movers and other expenses the move has to be job related. You need to meet certain requirements.

  • Move Close to Job Start Date – The move needs to take place within one year of your start date, and the distance between your new home and employer must be shorter than your current distance.
  • Meet a Distance Test – Your new employment location must be a minimum of 50 miles farther from your current home.
  • Meet a Time Test – During the first 12 months of working in the new location you must be full time for a minimum of 39 weeks. There are some exceptions, such as military-related moves and disability.

Deductible Moving Expenses

Some assume that only the cost of their national movers can be deducted, but this is not the case. Deductible national moving expenses include:

  • Materials and supplies for packing and unpacking.
  • Lodging along the way to the new location. Meals are not covered.
  • Up to 30 consecutive days of storage.
  • Increased insurance for 30 days.
  • Transportation costs, including vehicle rental and expense of national movers. This also covers moving items from a separate residence. For example, your mom is giving you her old dining room table that you need to stop and get along the way.

Charitable Donations

If you are like most, you will have boxes of household goods, clothes, etc., to donate when you start going through everything. You may even have furniture. The IRS allows deductions to nonprofit organizations for donations of usable goods.

You can find forms and more information on the IRS website. Basically, you need to make a list of everything you are donating along with the approximate market value. This is the amount you would likely sell the goods for at a yard sale. Get a receipt acknowledgement of your donations and keep it attached to your list. You will need both when you file.

Important Tips

  • When figuring the distance of the move to meet the distance test you have to use the shortest distance. You can’t take the scenic route just to reach the mileage requirement.
  • If you are married and file your taxes together only one spouse has to meet distance and time tests.
  • If you deduct your moving expenses, but don’t pass the time test, you will need to include the expenses in next year’s income or file an amended return.
  • Shipping costs for car through a national moving company may be covered.
  • Travel arrangements for pets are generally covered.
  • Utility connect and disconnect charges are IRS-approved deductions.