Q&A: Can I Write Off My Moving Expenses?

Real Estate

Q&A: Can I Write Off My Moving Expenses?

WARNING: Tax laws vary region to region, and are changed on a regular basis. Following is the only piece of advice in this blog post you definitely don't need to consult a tax professional about: always consult a tax professional when it comes to filing your taxes!

I got a great question from a new client the other day, and their inquiry inspired me to write a blog post. Let's face it: nobody likes paying taxes! Most of us understand that this responsibility helps keep our roads paved, our schools well stocked, and our country moving forward, but just because we have to do something, doesn't mean we are thrilled about it. Paying taxes almost reminds me of a child forced to take their medicine, especially a gut wrenching antibiotic like Augmentin. Now, not everyone will be able to receive a tax deduction due to their moving costs. In fact, a good amount of people would have the request denied by that parent making sure we ingest our medicine, the I.R.S. Still, it's always good to be educated, so if you are moving to a new house or plan on doing so in the near future, check out the following and see if you apply to these rules.

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Is a new job bringing you to a new area? Or perhaps your current employer has decided to transfer you to another location? If your new home is at least 50 miles further from your old job than your old house was, you may be able to write off your moving costs. If you were previously unemployed and have a new job waiting for you where your new house is, you might be able to seek a tax deduction as well, as long as the new job is 50 miles further than your old house. Basically, make sure your commute to work is easier and shorter after the move. If you lengthen the amount of time it takes to get to and from work and home, don't expect a sympathetic tax break from the federal government. If you are a member of the United States Armed Forces, a permanent change of station will almost always grant one some tax breaks. Additionally, those working full time jobs often can seek tax deductions from moving. If you expect to work full time for 39 weeks for the 12 months following your move, even if you are self-employed, you may be eligible to pay less taxes. Additionally, tell your taxman (or woman) about any expenses you've incurred within the first year of work at this new job, as that may be a factor in what you owe, or what you'll get back. Often, this doesn't apply for those who have been transferred by a current employer, people who have been laid off or lost their job due to something which wasn't their fault. These expenses won't be included as itemized deductions, but instead will be deducted directly from your adjusted gross income.

So, you must be asking, what are the specific deductions I can write off? Transportation for yourself, your family and your household items like furniture, cooking utensils and artwork for starters. So, anything from a moving company, a hotel you stayed at along the way to your new home, the gasoline and oil your car will require for the trip as well as storage needs for your house goods (for up to 30). You can be sure to drive the quickest route to your new life, as toll roads and expenses spent on paid parking can also be written off. Lastly, disconnecting and connecting your new utilities could be a deduction as well.

In years long past, one could seek tax relief by filing deductions for house hunting related travel. The federal government has also changed the amount of money one could claim for temporary living expenses during the selling of your old home and purchasing of your new one. Don't forget, normally speaking, expenses are deductibe in the year one pays them, not necessiarly the year of when the costs were collected.

Now, if your move is being paid for by your new or current employer, as long as the payment is for something which is a tax deduction, that money shouldn't be considered apart of your claimed taxable income. However, if your employer forks up some cash for something not deductible, that money will go towards your claimed taxable income. Now, ideally, your employer will add spenditure on things not deductible, like house hunting trips, in Box 1 of your W-2. However, we don't live in an ideal world, and your employer's ignorance won't be a suitable defense for tax fraud. I think I'll repeat my warning from the beginning of this blog post: ALWAYS CHECK WITH A TAX PROFESSIONAL!

I really can't stress enough two things: learn as much as you can about your local and federal taxes, and always consult a professional before filing. I hope you had as much fun reading this as I had writing it, and to anybody who thinks that may have been sarcastic, I love real estate tax law the way most men enjoy football.