Moving Expenses Deduction
You can deduct moving expenses if your move is work-related and passes time and distance tests. Moving expenses are considered adjustments to income. So, you can deduct them even if you don’t itemize your deductions.
To deduct moving expenses, you must meet one of these tests:
- Closely-related-in-time test — You must incur the expenses within one year from the date you first reported to your new work.
If you don’t move within one year of the date you first reported to work, you can’t deduct moving expenses. You might get an exception if you can show that circumstances prevented the move within that time.
- Closely-related-in-place test — The distance between your new home and your new job can’t be more than the distance from the former home to the new job. If you don’t meet this test, you might still be able to deduct moving expenses if you can show one of these:
- You’re required to live at the new home as a condition of employment.
- You’ll spend less time or money commuting from the new home to the new job location.
- Distance test — The move must be related to the start of a new job in a different location. The location of your new job must be at least 50 miles farther than your former job was from your former home.
Ex: If your old job was 15 miles from your former home, then your new job must be at least 65 miles from your former home to pass the distance test.
- Time test — If you’re an employee, you must work:
- At least 39 weeks during the first 12 months after you arrive in the area of your new job location
To pass this test, you don’t have to work at the same job for the entire time. You only have to work in the new area for the required time.
If you’re self-employed, you must work full-time for:
- At least 39 weeks of the first 12 months
- A total of at least 78 weeks of the first 24 months after your move
The time test is usually waived in these situations:
- Layoffs not due to willful misconduct
- Military commitments
- Transfers for the benefit of your employer
You deduct moving expenses in the year you move. You might not have met the time test when you file your return. Even so, you can still deduct your moving expenses if you reasonably expect to meet the time test in the future.
However, if you end up failing the time test and you’ve already deducted these expenses, you must do one of these:
- File an amended return for the year you claimed the expenses
- Report your moving expenses as other income for the year when you determined you can’t meet the test
You can deduct these moving expenses:
- Amount you paid to pack and store your household goods and personal items
- Amount it costs to travel from your old home to your new home. This includes mover’s costs, transportation, and lodging along the way. However, you can’t claim the cost of meals during the move.
If you use your own vehicle during the move, you can deduct one of these:
- Mileage traveled
- Out-of-pocket expenses you incurred during the move, like:
The mileage rate for 2021 is 23.5 cents per mile.
You can add parking fees and tolls to either the time or distance test.
You can’t claim either of these:
- Expenses your employer reimburses you for
- House-hunting expenses
To learn more, see Publication 521: Moving Expenses at www.irs.gov.
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