Moving Expenses

If you moved because of a change in your job location or because you started a new job, you may be able to deduct your moving expenses if your move is closely related to the start of work.

Moving expenses are not an itemized deduction.  You can deduct moving expenses on Form 1040 even if you use the standard deduction. 

To qualify for the moving expense deduction, you must meet both the distance and the time tests.  (The tests do not apply to members of the armed forces who's move was due to a permanent change of station.)

• Distance Test.  Your new main job location must be at least 50 miles farther from your former home than your old main job location was. Use the shortest distance of the most commonly traveled routes between these points.
1. What is the distance from your old home to your old job?
2. What is the distance from your old home to your new job?
3. Subtract the distance to your old job (1) from the distance to your new job (2).
4. If the result is 50 miles or more, you have met the distance test.
• Time Test.
• If you are an employee, you must work full–time for at least 39 weeks during the 12 months right after you move.
• If you are self–employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you move.
• There are exceptions to the time test in case of death, disability and involuntary separation. For more information refer to Publication 521.
If you meet the requirements, you can deduct the reasonable expenses of moving your household goods and personal effects to your new home. You can also deduct the expenses of traveling to your new home, including your lodging expenses. You cannot, however, deduct meals.

DEDUCTIBLE EXPENSES

Household goods and personal effects. You can deduct the cost of packing, crating, and transporting your household goods and personal effects and those of the members of your household from your former home to your new home. For purposes of moving expenses, the term “personal effects” includes, but is not limited to, movable personal property that the taxpayer owns and frequently uses.

You can deduct any costs of connecting or disconnecting utilities required because you are moving your household goods, appliances, or personal effects.

You can deduct the cost of shipping your car and your household pets to your new home.

You can include the cost of storing and insuring household goods and personal effects within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home.

Travel expenses. You can deduct the cost of transportation and lodging for yourself and members of your household while traveling from your former home to your new home. This includes expenses for the day you arrive.

You can include any lodging expenses you had in the area of your former home within one day after you could no longer live in your former home because your furniture had been moved.

You can deduct expenses for only one trip to your new home for yourself and members of your household. However, all of you do not have to travel together or at the same time.

Nondeductible Expenses

• You cannot deduct the following items as moving expenses.
• Any part of the purchase price of your new home.
• Car tags.
• Driver's license.
• Expenses of buying or selling a home (including closing costs, mortgage fees, and points
• Expenses of getting or breaking a lease.
• Home improvements to help sell your home.
• Loss on the sale of your home. 
• Losses from disposing of memberships in clubs.
• Mortgage penalties.
• Pre-move househunting expenses.
• Real estate taxes. 
• Refitting of carpet and draperies. 
• Return trips to your former residence.
• Security deposits (including any given up due to the move.)
• Storage charges except those incurred in transit and for foreign moves.

Reimbursements
If you receive a reimbursement for your moving expenses, how you report this amount and your expenses depends on whether the reimbursement is paid to you under an accountable plan or a nonaccountable plan.  Your employer should tell you what method of reimbursement is used and what records are required.

• Accountable Plans meet all three of the following rules:
1. Your expenses must have a business connection.
2. You must adequately account to your employer for these expenses Within a reasonable period of time.
3. You must return any excess reimbursement or allowance within a reasonable period of time.
If you meet the three rules for an accountable plan, your employer should not include any reimbursements of expenses in your income in box 1 of your Form W-2. Instead, your employer should include the reimbursements in box 12 of your Form W-2.
 
• Nonaccountable Plan.
• An arrangement that does not meet the three rules of an Accountable Plan.
• Your employer will add the amount of any reimbursement paid to you under a nonaccountable plan to your wages, salary, or other pay. Your employer will report the total in box 1 of your Form W-2.
• These include:
• Reimbursement of nondeductible expenses.
• Allowances for miscellaneous or unspecified expenses.
• Reimbursement by your employer for the taxes you must pay (including social security and Medicare taxes) because you have received taxable moving expense reimbursements.
• Excess reimbursements you fail to return to your employer.
• Your employer must withhold income tax, social security tax, and Medicare tax from reimbursements and allowances paid to you that are included in your income. 

You cannot deduct moving expenses on Form 1040EZ or Form 1040A.

Moving expenses are figured on Form 3903 and deducted as an adjustment to income on Form 1040.

You cannot deduct any moving expenses that were reimbursed by your employer.

For more information, refer to:

• Form 3903 Instructions
• Publication 521, Moving Expenses.
• Form 1040 Instructions, or
• Publication 17.