Tax Guide for your Georgetown Move

When the main reason for moving is a new job, you are fortunate enough if your employer will pay for your moving expenses but not all employers pick up your moving tab. You will have to prepare a budget to cover the expenses that will be incurred when you move. Fortunately, you can regain some of your money through tax deductions. The IRS has provisions that allow some of your moving expenses to be subtracted from your taxes. One of the smart things to do before you pack up your things and move out of town is to be aware how you can qualify for tax deductions.

There are three typical conditions that should be met so that you can qualify to deduct your moving expenses. These conditions include:

1. Timeframe: You should start your new job within a year of your move.
2. Distance requirement: The rule of thumb is that your new job must have a distance of at least 50 miles away from your home compared to your old job. So if the distance of your old home to your old job was 20 miles away, the distance of your new job to your old home must be at least 70 miles so that you can qualify for the tax deduction.
3. Time on the job: Self-employed and persons who are employed by other individuals or companies have to undergo a time test. An example would be a full-time employee should have worked at least 39 weeks within the first year after the move. Exceptions include not working with the same employer and not working all 39 weeks consecutively. For individuals who are self-employed, it is still 39 weeks but there is little more modification. During the first 24 months, one must work for a total of 78 weeks in order to qualify. In either case, tax deductions can be made before one meets the time test. In case the time test is not satisfied, the deduction that you have made from one year will be counted as income during the next year. Another option is to change the initial return.

When you are able to meet these three rules, the IRS will allow tax deductions for moving expenses and there will also be many moving-related costs which can be counted as tax deductable including storage and moving of your stuff, travel and lodging.

Keeping track of your expenses and keeping each receipt will help organize your records of the move. Have a record of mileage reports, hotel bills, oil and gas receipts, bills from the moving company and even receipts for storage fees.

Being ready with your receipts will make it easier for you to fill up IRS Form 3903. This form is a standard way to list down the details of your moving expenses. There are people who will not be needing this form—those who transferred to places outside the U.S. a year before the claim, movers who claim storage expenses while they are living outside the U.S., and those whose employers will reimburse their moving expenses.

Another good thing to do is to get a tax break to help cover your moving expenses. You should bear in mind that your moving expenses can only be deducted during the year they are made and if your employer is not picking up the tab. Your moving expenses can also be deducted before or after you are reimbursed when it is counted as income.

Among your moving expenses, the non-deductible ones include: costs related to mortgage and lease, licensing fees, and house-hunting expenses.