NEW YORK (MainStreet) — Did you move because of a new job or a new job location in 2014? You may be entitled to an “above-the-line” deduction for your moving expenses.
The distance between your new job location and your former residence must be at least 50 miles more than the distance between your old job location and former residence.
You can deduct moving expenses to your first job, or if returning to the workforce after an extended absence. A college graduate can claim the cost of moving from his family home in North Carolina when he is hired by a firm in California. The job location must be at least 50 miles from the former residence.
An employee must work full-time at the new location for at least 39 weeks in the 12 months following the move. Self-employed taxpayers must work full-time for at least 78 weeks during 24 months following the move. Any combination of full-time employment and self-employment will satisfy this test. For joint-filers, only one spouse must satisfy the time test.
You can deduct the out of pocket costs of moving your household goods, including the family pet, to your new location, and travel expenses, including overnight lodging but not meals, while on the road, for one trip for yourself and each member of your household. If you drive you can deduct 23.5 cents per mile. If you and your spouse each have a car, and you each drive your car to your new location, you can both claim the mileage allowance for the trip.
If you move within the U.S., you can also deduct storage and insurance of your household goods for up to 30 days after leaving your former residence.
For your expenses to be deductible, the move must be “closely related” in time to the start of work at a new work location and you must meet a distance test and a time test. Usually you must move within a year of starting work at the new location. However the move can be later if there are special circumstances. A couple was allowed to remain at their old home for 18 months after the husband started a new job to permit their daughter to complete high school.
Obviously you cannot deduct moving expenses that are paid for or reimbursed by your employer, unless the amount is included in the taxable wages reported on your Form W-2.
—Written by Hal M. Bundrick for MainStreet
Robert Flach has more than 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro.