Tax Tip of the Week
For the week of July 5, 2004

Take a deduction for moving expenses

Are you planning to move this summer? If your move is related to starting a new job, some of your moving expenses could be deductible. Here’s an overview of the basic rules.

If you want to deduct moving expenses, usually you must be employed or self-employed. The move must take place within a year of your starting a new job, and you must meet two other tests.

• Your new place of work must be at least 50 miles farther from your old home than your prior place of work was.
   
• You must work full-time for at least 39 weeks during the first twelve months after you arrive in your new job location. If you’re self-employed, you must also work full-time for a total of 78 weeks in the first two years in your new location.

If you meet the tests, you can deduct reasonable costs of moving your household goods and effects, as well as travel costs for you and your family when you actually move. Travel costs include fares and lodging but not meals. If you travel by car, you can claim actual costs for gas and oil, or take a flat rate of 14 cents per mile. Of course, you can’t claim a deduction for any amounts reimbursed by your employer. Make sure you keep good records to document your expenses.

These are the general rules. The full regulations are complex, with many exceptions and special cases. If you’re planning a move, check with us first to see whether you qualify for a deduction.

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