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What moving expenses are tax deductible?

When you’re in the middle of a move, you’re probably not thinking about tax returns. But when tax time rolls around, you’re likely thinking, “Can you deduct moving expenses?” The answer is that they’re only deductible if you moved for work. Whether it’s your first job, the same job at a new location, or a completely new job, you must meet certain requirements to receive any tax deductions for moving expenses. Let’s cover some basic information about relocating and tax deductions, then explore some more in-depth questions about what may or may not be tax deductible (including special circumstances like military and PCS moves).

moving expenses and tax deductions

Does your move qualify for deductions?

Before filing your taxes, it’s important to make sure you meet the specific moving expense requirements. No one wants any surprises during the strenuous tax season.

The primary requirement is that you’ve moved due to a change in your job, business relocation or because you started a new job or business. If you’re unsure about whether or not you meet this requirement, click to view the IRS Topic 455 which explains the specifics in more detail.

How to deduct moving expenses

If you can confirm that you’ve moved for work, you’ll then need to meet three more conditions to qualify for moving expense deductions. Based on the information from Publication 521, which is the IRS document all about deductible moving expenses, your move must:

  • be closely related to the start of work
  • meet the distance test
  • meet the time test

Closely related to the start of work

Generally speaking, you can deduct moving expenses acquired within one year from your job’s start date as long as the move is closely related to the location and start time of the new job. If you don’t move within one year of your job’s start date, these moving expenses typically can’t be deducted. However, if you can prove specific circumstances prevented you from moving within that time, such as not moving because your child is finishing out the school year, it may be possible to receive tax deductions. Consult a professional tax advisor for more information on circumstances that could still be tax deductible.

The 50 mile distance test

To pass the distance test, your new job must be located at least 50 miles farther from your former residence than your old job was. For example, if you lived somewhere that was 10 miles away from your old job, you’d have to take a job at least 60 miles away to qualify for the deduction. If you have no previous workplace, your new job location must be at least 50 miles from your old home to deduct moving expenses. For a visual example, check out the Figure A. Illustration of Distance Test on the IRS website.

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