Adjustment for Moving Expenses
Moving expenses can be deductible when the move was because of a new principal workplace. You can be an employee or self-employed but you must meet distance and time tests. The distance test is that the new principal workplace must be at least 50 miles more than the mileage from the old residence to the old workplace.
Example
Rob lived 5 miles from his old office. If he changes his principal workplace, it must be located at least 55 miles from his old residence.
The time test requires that a taxpayer claiming a moving expense deduction must work full time in the general area of the new workplace for at least 39 weeks during the 12 months following the move. A self-employed taxpayer must work at least 39 weeks during the first 12 months and a total of at least 78 weeks during the 24 months following the move. A college student who moves to begin employment may be eligible to deduct the cost of the move if the distance and times tests are met.
Expenses eligible for the deduction include the cost of transporting and storage of household goods and personal effects, and travel (transportation and lodging, but not meals) costs from the old to the new residence. Employer reimbursements of expenses will reduce the deduction. Employer reimbursement of expenses that are not deductible will be included in income.
Taxpayers can deduct the moving costs in the year of the move even if the time test has not been met. If a taxpayer later does not satisfy the time test, the amount claimed earlier would be reported as other income.
More information about the moving deduction can be found on Form 3903 (Form 1040) and in IRS publication 521 Moving Expenses.
Question and Problem
Which of the following expenses is not deductible as a moving expense?
Cost of moving household items.
Automobile expenses enroute to new home and workplace.
Motel costs during relocation trip.
Cost of food during relocation trip.
All of the above are deductible.
In June of this year, Deanna accepts a new job with the same employer in San Diego. She formerly commuted 12 miles to a job in Denver, Colorado; San Diego is 1,150 miles from her old home. She incurs the following expenses in the move from Colorado.
Item Amount Moving and packing charges $6,400 Transportation during the move 700 Lodging during the move 300 Meals during the move 200 Total $7,600 Deanna is not reimbursed for any of these expenses by her employer. What is the amount of her moving expense deduction? $__________
