[This deduction has been suspended from 2018 to 2025 for nonmilitary taxpayers]
If you recently experienced a career change that necessitated relocating to a new city, you could claim most of your moving expenses as a deduction on your tax return. You would use Form 3903 to figure out your moving expenses and report them as income adjustments on your 1040 form.
Qualifications for Claiming Moving Expenses on Taxes
Moving expenses are deductible if they are closely related to the start a new job and you meet certain time and distance criteria. Moving expenses incurred within one year of your first day at your new job are considered closely related to your relocation. If you don’t move within a year of starting your new job, you cannot claim moving expense deductions unless you provide an explanation of extenuating circumstances that prevented you from moving during that period.
Your move is also considered closely related to the start of your new job if the distance from your new residence to your new job does not exceed the distance from your former home to your new job. You could still deduct moving expenses if you don’t meet these criteria, however, if your job requires you to reside at your new home and/or it requires less money and time to travel back and forth from your new residence to your new job.
Your new job location must be 50 or more miles from your old address than your previous job’s location. If it’s your first job, the location must be 50 or more miles from your old address.
You must work for 39 weeks, full-time, during your first year upon your arrival at your new workplace. Self-employed individuals must work full-time for 39 weeks during their first year and a total of 78 weeks during their first two years after they arrive at their new location.
Deductible Moving Expenses
Moving expenses related to packing and transporting household and personal items from your old address to your new home are deductible. Other allowable deductions include:
- Costs for utility connection/disconnection
- Shipping costs for transporting your car to your new residence
- Costs for transporting your pets
- Costs for moving your household and personal items from a place other than your former home to your new residence
- Cost for storage and insuring of household and personal items
- Transportation, car mileage (if traveling by car), and lodging expenses
Some non-deductible moving expenses include:
- Costs for moving furniture purchased en route to your new home
- Expenses incurred during travel back to your former home
- Moving-related expenses incurred prior to your move
- Real estate taxes
- Expenses related to the sale of your former home or purchase of your new home
- Costs for driver’s licenses or car tags
- Security deposits
Refer to IRS Publication 521 (201.1) for more information on allowed and disallowed deductions and individuals exempt from time and distance test requirements, such as members of the armed forces, retirees, or persons who involuntarily separate from their job.