Did You Move in 2005? Deduct it!

Posted on 04. Mar, 2006 by in Taxes

moving_image.jpgToday’s tax tip is brought to you by the letters C, H, and Bankrate.com.

If you moved during 2005, chances are that you can deduct your moving expenses as you do your taxes this year. The deduction rule was created to help offset the cost of job relocation and therefore the move does need to be work-related; however, it doesn’t matter if it’s your first job, the same job or a new job. Here are a few of the requirements:

  • The move must be work related.
  • The distance between your new job and your former residence must be at least 50 miles greater than your old commute. That means if you lived 20 miles from your old job, your new job must be at least 70 miles from your old home before you can deduct moving costs.
  • Moving expenses are deductible within one year of starting the new job.
  • You have to work full time at a new job for at least 39 weeks during the first 12 months; however, worked weeks don’t have to be consecutive or even with the same employer. (Self-employed must work 78 weeks during the first 24 months) You can file your return right after you move, but if you end up not passing the “time test” you’ll have to file an amended return.

And here are a few of the items you are allowed to deduct:

  • The costs to move household goods and personal property, limited storage and insurance fees, and utility connection or disconnection charges.
  • Some lodging and travel expenses near your new and former homes also are deductible, as are shipping costs for your car.
  • You can write off the travel arrangements you make to get your household pets to your new home.

The great part about this deduction is that it directly affects your AGI and therefore doesn’t require you to itemize any other deductions. It isn’t phased out if you make too much money and there’s no percentage-of-income thresholds to meet. However, if your new employer reimburses you for some or all of your transfer costs, don’t look to the IRS for additional help. Moving expenses paid by your boss aren’t deductible.

All in all, the moving expense tax break is a good deal for legitimate moves. Just be sure to fill out this form and attach it to your 1040 in order to have Uncle Sam help offset those moving costs!

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