Tax laws and regulations are as easy to decipher and understand as a foreign language. When trying to evaluate whether your moving expenses are deductible on your income tax return there are a few tests you will need to pass.
*REASON FOR MOVING*
Not all relocations will be eligible for moving expense tax deductions.In order to be eligible for moving expense tax deductions you will need to be relocating for a new job.
The timing test is the most simple of the tax laws.Moving expenses will be eligible for tax deduction if they are incurred within one year of reporting to work in your new location.
The distance test is far more complicated that any of the other tax laws. If the distance from your new home to your new job location is shorter than the distance from your old home to your new job location AND your new job is at least 50 miles farther from your old home than your old job (if the distance between your old home and your old job is 8 miles then the distance between your new job and your old home must be at least 58 miles).
If you can not meet this first distance test but you can prove that you are required to move to a new home to accept the new job or your cost of commuting is lessened by moving to the new home location…
Congratulations, you have passed the tax law moving deduction time and distance tests and you can deduct your moving expenses from your tax return upon the completion of one final test.
*LENGTH IN NEW JOB*
The final test simply states that you must work at least 39 weeks within the first year at your new job location or 78 weeks within the first two years.
After reviewing and passing these three tests you will finally be certain of your eligibility for deducting your moving expenses from your tax return. These tests apply to anyone moving into or within the United States.