1. DISTANCE TEST REQUIREMENTS

 

In order to get a relocation tax deduction, there are several distance requirements you must meet.  The cost incurred moving within the same town do not qualify for a tax deduction. In addition to this, the distance between your new job and previous home must not be less than 50 miles farther compared to your former employer distance from your former place. If the previous distance from work to home was 3 miles each way, then the distance from your new job to your old home must not be less than 53 miles.

Furthermore, The IRS requires that you calculate the shortest possible routes between the two locations.  This is how one can determine if he satisfies the distance test and qualifies for a moving deduction on his tax return.

 

2. TIME TEST REQUIREMENTS

 

After relocating and arriving in the new place, you need to work full-time for not less than 39weeks of the first year. The 39 weeks don’t have to be consecutive or from a single employer. Multiple employers same location also applies. There’s no specification or clear guideline by the IRS that shows the number of hours or days you should work to be considered full-time. Instead, it relies on the commonly-accepted standard within your industry. This is a factor you must consider when pondering your relocation tax deduction options and whether or not your situation is included.

 

 

3. DEDUCTIBLE MOVING EXPENSES

 

The reasonable transport expenses usually incurred during relocation are covered by the deduction. For example, moving your personal effects as well as household items to the new place. If you are renting a unit for storage and move the stuff within 30 days from the initial day of relocation, then this can also be deductible.  Other costs that are deductible include traveling cost to the new place which applies to you and other household members. So, if you decide to drive yourself to the new area you can include the actual expense of gasoline, oil, parking fees, as well as highway tolls. The IRS requires you to compute these costs in reference to the annual rate of standard mileage. Train and airline tickets can also be included.

 

4.CLAIMING THE MOVING EXPENSES DEDUCTION

 

This deduction is considered one of the few relocation deductions a person can claim even before getting to know whether or not the requirements are satisfied. It is almost impossible for most taxpayers to satisfy the time-test requirement with the first year. However, according to IRS, the deductions can be claimed within the first 12-month period.

 

To be eligible for the deduction, all relocation expenses must be reported on an IRS Form3909 and included as part of your tax return covering the year you decide to move. The deduction should be reversed in case you fail to satisfy all the requirements at the end of the year. The original deduction can be included in “other income” usually on the subsequent tax return or change the initial return to compute your tax without including the deduction on moving expense.

 

Different platforms are available to organize your tax return and help you understand your possible relocation tax deduction. These are avenues that assist people in determining whether they qualify for s moving expense deduction including the amount you can claim.