Deductions: Moving Expenses

If you move to a new home for job-related reasons (either new employment or a transfer), you may be able to deduct the unreimbursed costs of moving you and your family if you meet the distance and time requirements set by the IRS. You may qualify for the deduction whether you're an employee or self-employed, but the expenses must be related to your beginning work at a new job location. The moving expense deduction is not an itemized deduction. Instead, it is an expense that you deduct when figuring your adjusted gross income (AGI) on your federal income tax return.

Expenses must be job related

Your expenses must be closely related in time to the start of work at your new job location

Generally, this means that you can deduct moving expenses you incur up to one year after the date you first report to work at your new job. Expenses incurred after a year are deductible only if you can show that circumstances existed that prevented the move within that time. For example, extra time may be allowed for a child to complete high school or for a spouse to complete an employment contract.

Your new home must be closely related in place to your new job location

Generally, the distance from your new home to your new job location should not be more than the distance from your former home to your new job location. In other words, your new home will not be considered closely related to your new job location if it results in a commute longer than that which you would have had from your old home. Even if your new home results in a longer commute than your old home would have, your move can still qualify if you can show that either (1) a condition of your employment requires you to live at your new home, or (2) you will spend less time or money commuting from your new home to your new job.

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