Relocation from one place to another is bound to put a sizeable dent in your pocket, however, if you have a job which requires you to move from time to time, then you can cut down on your expenses when relocating from tax deductions from your move. There are certain conditions which have to be met but a tax deduction when moving will help you relocate without having to splash the cash. Here are some of the conditions which have to be met in order to qualify for a tax deduction when relocating:
- You experienced relocation expenses in the duration of at least 1 year, since you started your job.
- The place where you work at now is more than 50 miles away from your home, than the place at which you worked at previously.
- You must be employed full time by your employer and work nearby your current job location for at least 39 weeks, during the 1 year after you have relocated. If you work for yourself then you should work for 78 for 2 years after you relocate.
You can still qualify for tax deductions even after you fail to meet the requirements of your work in the duration of time you are required to meet, if you are expected to fulfil the conditions in the following tax year. If you don’t qualify for tax deductions after relocation and yet you still claim the tax deduction you be required to report the entire amount as your income when the tax for the next year comes, or you can make changes to your previous tax returns.
In the event that you are required to relocate to a different country or if you are employed as a member of the armed forces, then you should speak to a qualified tax advisor regarding any exceptions for tax deductions which may influence you.
Realize What Moving Expenses You Can Deduct
There are a lot of costs which you may incur during the course of relocation and identifying exactly which of those expenses you can waive off as deductible is essential to avoid any confusions. You can deduct any expenses for relocating all household goods and personal items to the new house, since the tax deduction will only be applied to expenses that have affected you and you have not been compensated for them. These costs may include:
- All transportation costs of goods
- The crating, packing and unpacking of goods
- The transit storage phase and the valuation coverage of goods
You also qualify for tax deductions, when you have not been compensated for the expenses you incurred for:
- The shipping costs of your boats and automobiles
- The transportation costs of your pets, such as cats, dogs, tropical fish, birds etc.
- The costs for disconnecting and connecting your utility items for the move.
The cost of travelling for you and your family to your new home is also deductible, which also includes all lodging expenses, but does not include meals. You can also deduct all costs that you incur while relocating your personal items to a place other than your home, but the overall expenses must not exceed the cost it would have taken to move the items to your home.