Summertime is a popular time for people to move. Moving can be expensive, but Clergy Financial Resources offers 10 tax tips on deducting some of those expenses if your move is related to starting a new job or a new job location.
- Move must be closely related to start of work: Generally, you can consider moving expenses incurred within one year from the date you first reported to a new location, as closely related in time to the start of work.
- Distance Test: Your move meets the distance test if your new main job location is at least 50 miles farther from your former home than your previous job location was.
- Time Test: You must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location, or at least 78 weeks during the first 24 months if you are self-employed. If your income tax return is due before you’ve satisfied this requirement, you can still deduct your allowable moving expenses if you expect to meet the time test in the following years.
- Travel: You can deduct lodging expenses for yourself and household members while moving from your former home to your new home. You can also deduct transportation expenses, including airfare, vehicle mileage, parking fees and tolls you pay to move, but you can only deduct one trip per person.
- Household goods: You can deduct the cost of packing, crating and transporting your household goods and personal property. You may be able to include the cost of storing and insuring these items while in transit.
- Utilities: You can deduct the costs of connecting or disconnecting utilities.
- Nondeductible expenses: You cannot deduct as moving expenses: meals, any part of the purchase price of your new home, car tags, drivers license, costs of buying or selling a home, expenses of entering into or breaking a lease, security deposits and storage charges except those incurred in transit.
- Only Reasonable Expenses: You can deduct only those expenses that are reasonable for the circumstances of your move.
- Moving allowance: If your employer pays a moving allowance to you for the cost of the move, the allowance may need to be included as taxable income.
- Update your address: When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS.
Clergy Financial Resources https://www.clergyfinancial.com Clergy Financial Resources is a national accounting and finance organization serving churches and clergy since 1980. They have an unparalleled tax expertise on the complex issues associated with clergy tax law, clergy taxes, clergy compensation and church payroll. Clergy Financial Resources is a valuable resource for clergy, churches and denominations.< Back
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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