With tax season just around the corner, a lot of people are looking for ways to reduce their tax burden and walk away with a bigger refund. If you’ve moved this year because of your job, then you’re in luck!
The IRS offers special tax breaks for people who have moved and are now working in a different place, different job, or even just choose to be self employed in a new location.
While there are some rules that need to be met in order to claim your moving expenses as part of your taxes, the process is far easier than many people might have originally imagined.
Here are some of the things that you need to know about the tax deductions that are related to moving so that you can jump in and claim them today!
How Far Away?
The IRS puts only a few rules on the moving expenses deduction, which taxpayers must meet, in order to qualify for the moving expense deduction. One of the most prevalent of these rules is known as the 50-mile rule, which states that your new home must be at least fifty miles beyond the distance your old home was from your place of work.
For those of us who get confused by this language, this means that your new home, if your old home was five miles from your job, must be fifty-five miles from your old home. This ensures that you are not simply moving to make it easier to get to work, but are moving to sustain employment and continue to be self sufficient rather than falling on welfare or other government programs. In order to figure this distance, taxpayers must use the most common routes of travel, instead of figuring in scenic paths and similar routes.
Time in Place
The other rule that the IRS makes potential claimers of this moving expense deduction meet is known as the time requirement or time test. There are two different aspects to this rule, and it basically exists to ensure that people aren’t using the tax breaks just to get a new place, live in a new area, or travel the country on the dime of the Federal Government.
The first aspect of this requirement says that the moving expenses incurred are deductible if they were paid within a year of starting a new job. The second aspect of this requirement says that you have to work, full time, for a minimum of thirty-nine weeks of the year you move, or, during that first twelve months of living in the new area, in order to be eligible. However, those thirty-nine weeks do not have to be with the same job, company, or sector.
Accounting for and Meeting the Rules
Regardless of where you have moved, or why you moved there, be sure that you have all of the records on hand to show that you actually qualify for this deduction. The IRS has been known to dig into the returns of people who have claimed their moving expenses, so take some time to ensure you have proof to back up the claim.
Don’t forget that you can also deduct some of your travel expenses that you have to pay to get your family, and your vehicles, to your new home. And finally, don’t hesitate to include charges for not just the movers who helped you move, but for the insurance, utility fees, and storage fees that you incur as well.
The writer of this article, Alyssa Sullivan, knows how expensive moving can be. That’s why she maintains a blog that can help consumers find good, cheap moving companies for long distance moves at: http://www.movingcompanies.us/how-find-cheap-good-long-distance-moving-companies