Relocating for work can equal tax deductions
Approximately 50 million Americans move every year. These movers will certainly incur a variety of expenses, and for some those moving expenses may be tax-deductible if they are moving for work. In addition to moving expenses, job search expenses could end up being eligible tax deductions, as could items they don’t want to pack, but instead donate to charities.
Deducting moving expenses
If a taxpayer moves their household – which may or may not include other people – they could potentially deduct the expenses for relocating everyone and their belongings if the move is for work. These expenses could include truck rental, moving boxes, meals and lodging. Because these eligible expenses are “above-the-line” deductions, even taxpayers who don’t claim itemized tax deductions can deduct them.
Taxpayers moving for a job and interested in deducting their eligible moving expenses, should know these numbers:
- 50 miles – The new job must be at least 50 miles farther away from the old residence than the old job was. For example, if the old commute was 10 miles to work, the new job must be at least 60 miles from the old residence.
- 39 weeks in 12 months – The taxpayer must work full-time for at least 39 weeks within the first 12 months after the relocation. If a taxpayer moves in hopes of finding a new job in their new community, their expenses are eligible. The 39 weeks of work do not have to be consecutive. Some exceptions that allow taxpayers to claim these expenses even if this time rule is not met include loss of job due to disability, or being laid off for any reason other than willful misconduct.
- 78 weeks in 24 months – Self-employed taxpayers must work double the amount of time in double the timeframe; they must work 78 weeks, which do not have to be consecutive, within the first 24 months after moving. But, 39 weeks of work must still occur within the first 12 months.
Deducting job search expenses
If the move was for a new job in the current occupation – but not a first job – some taxpayers also might have job search expenses that are eligible tax deductions. Eligible expenses include résumé development, professional placement services, and unreimbursed mileage, airfare and hotel expenses for interview travel. Other things might be eligible if they were used exclusively for the job search, if the new position being sought is in the same field and the items are ordinary and necessary.
Deducting downsizing donations
In addition to deducting eligible moving expenses, people who move for work also might find it beneficial to track charitable donations they made while weeding out items they decided they didn’t want to move. There is a threshold that must be reached: donated clothing and household items in condition good enough to be re-sold at a thrift store are likely eligible deductions. When making these donations be sure to get a receipt.
Relocating can be an expensive venture, but keeping track of the related expenses could lead to tax savings in the long run. For more information about these tax deductions and others, visit The Community or The Newsroom.
By Teresa L. Clark
Teresa L. Clark came to H&R Block in January 2010 after working as a civil servant for more than 13 years. Since that first tax season she has written blog posts and talking points, edited content of all shapes and sizes, facilitated media interviews for the experts in The Tax Institute at H&R Block and supported the DIY team. Clark has a master's degree in integrated marketing communications from the University of Kansas and is a member of the Honor Society of Phi Kappa Phi.