Tax Tip of the Day: Moving Tax-Break Obstacles

The biggest moving hurdle, practically and tax wise, is the 50-mile distance test. As suburbia and exurbia expand, this test is designed to ensure your move isn’t just a way to ease your daily commute to work.

The location of your new job must be at least 50 miles farther from your previous residence than your last office was. That means if you lived 10 miles from your old job, your new job must be at least 60 miles from your old home before you can deduct moving costs.

The IRS says to figure the distance using the shortest of the more commonly traveled routes; i.e., don’t take the scenic route to make sure you meet the mileage measurement. Also, remember the distance test only considers the location of your old home and how far it is from your previous job versus the one for which you relocated, not your new residence.

Then there’s the time requirement. It has two components and is Uncle Sam’s way of guaranteeing you don’t use tax breaks just to help you check out the scenery around the country. First, moving expenses generally are deductible if incurred within one year of starting a new job. Secondly, you have to work full time at a new job for at least 39 weeks during the first 12 months. The worked weeks don’t have to be consecutive or even with the same employer.

Once you meet the time and distance requirements, gather your moving receipts.

IRS-approved deductions include 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.

Uncle Sam even lets you write off the travel arrangements you make to get your household pets to your new home.

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About Berrios & Associates, Inc.

Since 1999, Berrios & Associates, Inc. has been providing a distinctive mixture of leadership-knowledge, and customer service satisfying client needs in advisory, tax, and outsourcing. Serving a diverse client base from individuals and sole proprietors to private corporations with nationwide and international locations. In the domain of accounting firms, Berrios & Associates has engraved a distinctive business based on diverse solutions through the interpersonal relationship of corporate and personal tax, corporate back office support, and business growth advisory. The firm directs clients through their everyday operations to ensure they have the right business model in place to meet their business goals.