If you moved during the year, and the move was related to your work, don’t forget to gather up the receipts and keep records of your moving expenses. You may be able to take a deduction without having to itemize. It doesn’t matter whether you’re self-employed or work for somebody else, or if you move to a new location with the same employer or move to start working for a new employer.
Tests to qualify for the moving expense deduction
Moving expenses can be taken as a deduction in calculating Adjusted Gross Income, so they will directly reduce the amount of income subject to tax. In order to claim the deduction, you must meet three tests:
Your move must be closely related to the start of work.
You must meet the distance test.
You must meet the time test.
Closely related to the start of work
The closely related test refers to both time and place. Closely related in time generally means moving expenses incurred within one year from the date you start work at the new location. For example, if you started working at a new location and moved your family later, the move still qualifies. Closely related in place means your new home is closer to your new place of work than your old home would have been.
Distance test
Your new main job location must be at least 50 miles farther from your former home than your old job location was from your former home. If you move in order to start your first full-time job, your place of work must be at least 50 miles from your former home. This also applies if you move in order to go back to work after a substantial period of unemployment or part-time work.
Time test
If you are an employee, you need to work full-time at your new location for 39 weeks during the first 12 months. The 39 weeks do not have to be consecutive or for the same employer. If you are self-employed, the requirement is 78 weeks during the first two years. If you are married filing jointly, either spouse can meet the time test, but you cannot add your weeks together in order to meet the test.
You can deduct moving expenses even if you haven’t yet met the time test by the due date for filing your tax return. Then, if for whatever reason you don’t eventually meet the time test, you must either:
Report the moving expenses you previously deducted as other income on your return for the year you can’t meet the test, or
File an amended return for the year you took the moving expense deduction.
There are exceptions to the time test. You do not have to meet that test in any of the following cases:
You are in the Armed Forces and were assigned to a different station.
You were working outside the United States and moved back to the U.S. to retire.
You are transferred for your employer’s benefit or are laid off.