By Elizabeth Rosen of IRS.com
Moving to a new home involves a lot of planning and work, and it can be costly as well. If you are moving because you got a new job, or your current job changed location, you may be able to deduct your reasonable moving expenses on your income tax return.
Note: The moving expenses tax deduction is an “above-the-line” deduction, which means it is taken before your AGI (adjusted gross income) is calculated, instead of after like most other deductions. Above-the-line tax deductions are subtracted from your gross income and the resulting number is your AGI. Therefore, above-the-line deductions apply whether you itemize or not. Above-the-line deductions, like the moving expenses tax deduction, are designed to help protect your personal exemptions and itemized deductions from phaseouts. Because of these characteristics, above-the-line deductions are often considered to be the most beneficial for taxpayers.
Who can deduct moving expenses -- tests for eligibility
To be eligible to claim the moving expenses tax deduction, the IRS has 3 main requirements that you must meet:
• Your move is closely related to the start of work
• You meet the distance test
• You meet the time test.