First Household Move in Awhile? Check Allowable Deductions Before Filing Taxes

March 10, 2000

EVANSVILLE, (Ind.) - Americans who moved last year for the first time since 1994 should do some checking on allowable tax deductions. Moving expenses are no longer considered an itemized deduction, and some deductions that were allowed in the early 90s were written out of a federal tax code that took effect in 1994.

Today, domestic relocation costs can be deducted from adjusted gross income when the move meets certain requirements and the paperwork is done correctly. Knowing the tax code and how it relates to moving expenses can save hundreds or thousands of dollars. On a typical move that costs $3,500 for example, the tax savings would be $980 for those taxpayers with a 28 percent incremental tax rate.

What Came Out in '94

  • Qualified real estate expenses - Those costs associated with buying and selling your home are no longer allowable as a moving deduction.
  • Expenses for pre-move house-hunting trips - These costs, including meals and temporary quarters, can no longer be deducted as moving expenses.
  • 35 to 50 - The parameters of what's considered a deductible move changed from at least 35 miles to at least 50 miles. See "Who Qualifies?" for details.

What Still Stands

  • You may file a deduction for the cost of transporting and storing your household goods and personal effects, with certain conditions.
  • You may deduct for the family's travel and lodging from the old residence to the new residence, not including meals.
  • You may deduct for mileage expenses if the move meets the proper criteria.

Atlas Van Lines offers these tax guidelines:

Household goods and personal belongings - You can deduct the cost of moving your household goods and personal belongings as long as you have not already been reimbursed for these costs by your company or another entity. This reimbursement will not be includable in your income if it covers only amounts that can be deducted.

The household moving deduction includes the actual cost of transportation from your old residence to your new one, the cost of packing and crating, unpacking, storage in transit (limited to 30 consecutive days) and the cost of valuation coverage to protect your belongings during transit (limited to 30 consecutive days).

Other Deductible Items

  • The cost of shipping your automobile.
  • The cost of transporting your household pets; from dogs and cats to tropical fish.
  • The cost of moving your personal belongings from a place other than your old residence. This amount cannot exceed what it would have cost to move these items from your old residence.
  • The family trip to the new residence. This includes lodging, but not meals.

Who Qualifies?
Anyone can deduct moving expenses, even if you don't file an itemized return, as long as you meet these six qualifications:

  1. Your new job location must be at least 50 miles farther from your former residence than your old job location.
  2. You must be moving to a new principal residence to work as an employee or as a self-employed individual at a new principal place of work.
  3. You must be employed full-time in the general vicinity of the new job location for 39 weeks during the 12-month period following the move. Self-employed people must continue to work in the new location for at least 78 weeks during the 24 months following the move, of which at least 39 weeks must be in the first 12 months.
  4. If you pay the expenses in one tax year, but do not satisfy the working requirements by the tax return due date, you may still deduct the expenses if you reasonably expect to satisfy the condition in the succeeding tax year. If you fail to satisfy the requirements, you must report an equal amount of income in the succeeding year or amend the prior year's return.
  5. You may not deduct expenses in excess of a reasonable amount.
  6. Foreign moves and moves by military personnel are subject to special limitations.

Plan Ahead
For those planning a move in the near future, be sure to plan as far ahead as possible. Before relocating, make sure to keep receipts. Itemize any goods given to charity and keep a receipt. It may help you qualify for additional tax deductions. Deductions can be significant when using a professional mover. Before filing taxes, consult with a professional tax advisor.

For more information on deducting moving expenses, contact a tax advisor or call the IRS Problem Solving Line at 1-800-829-1040 and ask for a guide on moving expenses. Atlas Van Lines can also offer its brochure, "How to Deduct Moving From Your Taxes." Call your nearest Atlas agent to request a copy, or visit the Atlas Web site at