Get an Extra Tax Deduction While You’re On the Move
Time is almost up! Yes, the annual event of paying taxes has arrived. Now is the moment to get your required paperwork and forms submitted, including all your deductions so that you can receive your tax refund check.
As tax time rolls around, you've got to grab every break you can. Unfortunately, some large tax breaks are practically unknown to many taxpayers and are often overlooked.
Making a Move
In today’s society, most people will move at least once in their lifetime. And the most common items transported from place to place are household goods (73%) and computers/electronic equipment (20%).
If you were one of the 11.2 percent of Americans that recently changed your home location, the IRS will actually pay you if you moved for job-related reasons. ,
With the average cost of an interstate move at $4,300, and $2,300 for an in-state move, anything you can do to recoup some of the cost will be helpful.
Parameters and Requirements
If you ventured out to secure a new position and succeeded in your job hunt, you may be required to relocate. Meeting the following criteria could land you a significant tax break.
• You have to move within one year of the job change
• The new workplace must be at least fifty miles away from your current home
• You meet the IRS “time test” by working full time near the new location for at least 39 weeks during the next 12 months (If you are self-employed, the rules are slightly different)
There is no need to fret about this “time test.”. Since most people could not satisfy the requirements of the time test until the following tax year, the IRS allows you to claim the deduction in the same year you move. The moving expense deduction is one of the few tax deductions you can claim before knowing whether you actually satisfy the requirements.
Plus, there is good news for our heroes in the Armed Forces. Military members moving for a Permanent Change of Station do not need to meet the distance or time tests. This is due to the fact that the move is usually required by the U.S. government.
Don’t leave money on the table. If you meet these rules, then you’re in luck! You can deduct some moving expenses and save yourself a bundle of cash.
For those who were fortunate enough to find a new job, but needed to move for work-related reasons in 2017, be aware that there are some limits on what may be deducted.
A few of the more-commonly incurred costs arguably related to moving that you are not permitted to deduct include those expenses for:
• improvements to your home to help sell it
• closing costs, mortgage fees, and other similar costs associated with selling your home
• security deposits
• any portion of your new home’s purchase price
The good news, however, is that several items can be deducted. Here are some of the expenses that may be allowed in your specific relocation:
• Costs related packing your goods
• Fees for moving your personal property
• Some costs for storage for up to 30 days (Did you know there are more self-storage units in the U.S. than McDonald’s and Starbucks locations combined?)
• Insurance costs
• Lodging expenses directly associated with the move
Sadly, in the future, the government may eliminate portions of this deduction. So, it is critical that you jump on getting this tax break and take advantage of this opportunity for tax savings now.
Let moving to your new job benefit your bottom line. To assure you are awarded this tax break, it is critical to maintain an accurate record of expenses you paid to relocate. You should save items such as receipts, bills, credit card statements, and mileage logs.
The bottom line is that the deduction for moving expenses could potentially be worth hundreds of dollars to you. It is certainly worth your time to see if you qualify. And after you file your taxes, you can check the status of your refund at IRS.gov/Refunds.