You or an employee may be able to deduct certain expenses related to moving to a new home if the move is related to your work. Here are some guidelines related to a work-related move, provided by the U.S. Internal Revenue Service.
(Note: As we always advise, each individual or small business can have unique circumstances that can impact the taxes you may or may not owe, so always seek advice from your trusted business, tax and financial advisor when making decisions about taxes.)
Home means the taxpayer’s main home | It does not include a seasonal home or other homes owned or kept up by the taxpayer or family members. Eligible taxpayers can deduct the reasonable expenses of moving household goods and personal effects and of traveling from the former home to the new home.
Reasonable expenses may include the cost of lodging while traveling to the new home | The unreimbursed cost of packing, shipping, storing and insuring household goods in transit may also be deductible.
Who can deduct moving expenses?
The move must closely relate to the start of work | Generally, taxpayers can consider moving expenses within one year of the date they start work at a new job location.
The distance test | A new main job location must be at least 50 miles farther from the employee’s former home than the previous job location. For example, if the old job was three miles from the old home, the new job must be at least 53 miles from the old home. A first job must be at least 50 miles from the employee’s former home.
The time test | After the move, the employee must work full-time at the new job for at least 39 weeks in the first year. Those self-employed must work full-time at least 78 weeks during the first two years at the new job site.
Advice and resources from the IRS
Reimbursed expenses | If an employer reimburses the employee for the cost of a move, that payment may need to be included as income. The employee would report any taxable amount on their tax return in the year of the payment.
Form 3903, Moving Expenses | The form you need to use to claim the moving expense deduction when filing a federal tax return.
Nondeductible expenses | Any part of the purchase price of a new home, the cost of selling a home, the cost of entering into or breaking a lease, meals while in transit, car tags and driver’s license costs are some of the items not deductible.
Recordkeeping | It is important that taxpayers maintain an accurate record of expenses paid to move. Save items such as receipts, bills, canceled checks, credit card statements, and mileage logs. Also, taxpayers should save statements of reimbursement from their employer.
Military moves | Different rules may apply to members of the Armed Forces or a retiree or survivor moving to the United States.
Address Change | After any move, update the address with the IRS and the U.S. Post Office. To notify the IRS file Form 8822, Change of Address.
Additional moving-related resources from the IRS
- Publication 521, Moving Expenses
- Can I Deduct My Moving Expenses?
- Tax Topic 455 – Moving Expenses
- Form 3903, Moving Expenses