Moving expense can save you on taxes.
With so many people moving in and out of Phoenix, many people wonder if there is any tax saving with the move. Kerry Freeman, EA of the Central Arizona Chapter of Enrolled Agents (CACEA) shows you ten things you need to know about moving expenses.
Generally Deductible You can usually deduct moving expenses if you relocate because of a change in jobs. But no two moves are alike, and there are several tests you must meet to claim the deductions. As always, save your receipts.
How To Deduct Moving expenses are deducted from your gross income in arriving at your adjusted gross income. This can be advantageous because you don't have to complete Schedule A-Itemized Deductions to receive the deduction.
Meals In general, meals bought in connection with a move, expenses related to searching for a new house or living in temporary quarters and expenses incurred in selling, purchasing or leaving a house in connection with a move are not deductible.
Start Of Work You can generally consider moving expenses incurred within one year from the date you first reported to work at the new job. It's not necessary that you line up a new job before moving to a new city, as long as you actually find a job and go to work.
First Job If you go to work full time for the first time, your place of work must be at least 50 miles from your former home to meet the distance test. If you go back to full-time work after a substantial period of part-time work or unemployment, your place of work must also be at least 50 miles from your former home.
Armed Forces If you are in the Armed Forces and you move because of a permanent change of station, you don't have to meet the 50-mile distance test.
More Than One Job If you have more than one job at any time, your main location depends on: a) The total time spent at each place b) The amount of work you do at each place c) How much money you earn at each place.
Time Test If you're an employee, you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location to deduct moving expenses.
Self-Employed People If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you arrive in the general area of your new job location.
Household Goods You can deduct the cost of packing, crating and transporting your household goods and personal effects and those of members of your family from your former home to your new home.
Mr. Freeman and members of the CACEA can provide you with more information on your particular situation. Visit CACEA.Com and find an Enrolled Agent near you today or call Mr. Freeman at 623-518-2157. Enrolled Agents are the only professionals that are tested by the U.S. Treasury Department (IRS) for competency in taxes. Member of CACEA are held to a high standard of Ethics giving the taxpayer confidence that Private Information stay Private and protected.