Moving To A New Location ? Tax Information

Posted by Nick Niesen on November 8th, 2010

In modern America, it is rare to find a person or family living in the same place for thirty years. Most of us move five or ten times, which means taxes become an issue.

Moving To A New Location ? Tax Information

I hate moving. Absolutely loathe it. I am sure you do as well. Nonetheless, you, me and everyone seem to move all the time. Whether we are buying and selling real estate or just getting a new start in a new location, there are lots of little things we have to get in order. While utilities and cable are first on the list of things to handle, most people fail to pay close attention to tax issues and miss out on some juicy deductions.

If you are moving, you are inevitably going to dish out some cash for movers, a truck, boxes, gas, hospital visits, aspirin, more aspirin and so on. Fortunately, these expenses may be deductible on your next tax return. There are three tests you have to meet.

Initially, you have to be starting work at a new job location. Many misunderstand this requirement to mean that you have to already have a job when you move and that is the reason for the move. This is incorrect. You must simply find a new job once you have moved.

The second requirement deals with timing issues. Assuming you are going to start a new job, you must actually start within a prescribed time. This time period is a year from the date of the move. This should be relatively easy to comply with as the lack of a new job within a year probably will mean you have returned to your old job and location.

The third test is known as the distance test. The IRS calls this the closely related in place test. Essentially, you have to be able to show the distance from your new residence to your new job is smaller than the distance from your previous residence to the new job. Your new job location must also be at least 50 miles from your old one. This should be pretty simple for most people to show. If you can?t meet this test, you can get around it by claiming the commute is easier and cheaper than your old one.

If you meet these tests, you can claim some nice deductions. They include travel expenses and all moving expenses reasonably related to the move including 30 days of storage. Sorry, but you don?t get to deduct hotel stays and food. Regardless, you can claim the deductions on form 3903. Just attach it to your 1040 when you file.

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Nick Niesen

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Nick Niesen
Joined: April 29th, 2015
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