|
Tax Tips: Deducting Moving Expenses
If you moved in 2001, chances are you're ecstatic that the hassle of moving
is finally over. But don't put it too far out of your mind - if you or your
spouse got a new job or transferred to a new work location, you might be
able to deduct your moving expenses from your taxable income.
The U.S. Census Bureau reports that about 16 percent of all relocations in
2000 were work-related - a new job in a new community or state, or a move
to ease a stressful commute.
Before you start counting the dollars you might save, you must first pass
the IRS' moving deduction test.
In order to qualify, there are two major criteria you must meet - the move
must be close to the time you begin work and your new home must be closer to
your place of employment than your former home and workplace.
The IRS says you can generally consider moving expenses incurred within one
year from the date you begin work at the new location. It doesn't matter if
you get the new job before or after you move.
In order to pass the distance test, your new 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 workplace was 10 miles from
your old house, your new place of employment must be at least 60 miles from
the former home.
And when it comes to the time test, if you are an employee you must work
full-time for at least 39 weeks during the first 12 months after you arrive
in the region of your new job location.
It's a bit tougher if you're self-employed - you must work full time for at
least 39 weeks during the first 12 months and for at least 78 weeks during
the first 24 months after you arrive. If you're married, you can use you or
your spouse in determining the number of weeks worked, but you can't combine
weeks.
Of course, there are exceptions. For example, if you're a member of the
Armed Forces on active duty and you move because of a permanent change of
station, you don't have to meet the time and distance tests.
So, if you've passed the tests, what can you deduct?
The cost of packing, crating, and transporting your household goods.
Storage and insurance costs related to goods and personal effects within
any 30-day period after your things are moved from your old home and before
they are delivered to your new place.
The cost of connecting and disconnecting utilities.
The amount you pay to ship your vehicle and your pets to the new house.
Lodging expenses your family incurs during the move period. Meals are not
deductible.
Traveling to your new home. If you travel by car, you can deduct the
standard mileage rate of 12 cents a mile or deduct the actual expenses of
gas and oil, parking fees and tolls. You can't deduct general repairs,
maintenance, insurance or depreciation of your car's value.
And the IRS lists a whole slew of things that can't be deducted - everything
from the purchase price of your new home to your driver's license to
refitting of carpets and draperies.
One thing to keep in mind is that you can't double-dip by taking a moving
expense deduction and a business expense deduction for the same expenses.
You'll want to take a look at the IRS' publication 463, Travel,
Entertainment, Gift, and Car Expenses to determine which deduction is more
advantageous.
You also can't deduct any moving expenses that were reimbursed by your
employer.
Moving expenses are figured on Form 3903 and deducted as an adjustment to
income on Form 1040.
Written by Michele Dawson
Find Utah Homes for Sale: -- Logan Utah Homes
Homes in Utah
| 
