Moving involves serious time and effort, and it can cost a significant amount of money as well. Below, Nationwide Relocation Services explains how the IRS determines your eligibility for moving deductions when paying federal and state taxes.
Community Blog: When is an individual eligible for moving deductions?
Nationwide Relocation Services: If the move is related to a change in business or job location, or the individual has created a new business or job, he or she may be permitted to deduct reasonable moving expenses.
Community Blog: How is this eligibility determined?
Nationwide Relocation Services: To qualify, the individual must satisfy two different tests. The first, known as the “distance test,” states that a workplace must be located at least 50 miles farther from your previous residence than the old job location was from your previous residence. As far as self-employed contractors, the new job site must be at least 50 miles from your old residence. The second, referred to as the “time test,” states that an employee must work full time for at least 39 weeks during the first 12 months immediately following arrival in the new area.
Community Blog: Are there any exceptions to this rule?
Nationwide Relocation Services: The time test includes exceptions for disability, death, involuntary separation and other life events. Active members of the armed forces whose moves are mandated by military order and a change of station are not required to satisfy both the time and distance tests.
Community Blog: On what form are moving expenses documented?
Nationwide Relocation Services: Moving expenses are found on Form 3903 and can be deducted as an income adjustment on Form 140. Remember that no moving expenses can be deducted if covered by an employer.
Community Blog: Where can people find more information on moving expenses?
Nationwide Relocation Services: The best reference is Publication 521, Moving Expenses. Publication 521 also contains details about moves both in and outside the United States.
As one of the leading moving brokerage firms in the United States, Nationwide Relocation Services leverages the nation’s top moving companies and affiliate movers for the benefit of their clients.