You can deduct the cost of moving expenses if your move is work-related and passes certain time and distance tests. Because moving expenses are considered adjustments to income, you can deduct them even if you don’t itemize your deductions.
To deduct moving expenses, you must pass the following tests:
Closely related in time and place tests:
Closely related in time: An expense is closely related in time when it is incurred within 1 year from the date the taxpayer first reported to the new work location. If the taxpayer does not move within 1 year of the date that the taxpayer first reported to work, the taxpayer cannot deduct moving expenses unless the taxpayer can show that circumstances existed that prevented the move within that time.
Closely related in place: To be closely related in place, the distance between the new home and the new job must not be more than the distance from the former home to the new job. If the taxpayer does not meet this requirement, the taxpayer may still be able to deduct moving expenses if the taxpayer can show that (i) the taxpayer is required to live at the new home as a condition of employment, or (ii) the taxpayer will 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. For example, 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 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 pass the time test, you don't have to work at the same job for the entire time. You just 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, and a total of at least 78 weeks of the first 24 months following your move. The time test is generally waived in the following situations:
Disability
Layoffs not due to willful misconduct
Death
Military commitments
Transfers for the benefit of your employer
You deduct moving expenses in the year of the move. If you haven’t met the time test when you file your return, you can still deduct your moving expenses as long as you reasonably expect to meet the time test in the future. However, if it turns out that you fail the time test and you have already deducted these expenses, you must either file an amended return for the year that you claimed the expenses or report your moving expenses as other income for the year in which you determine that you can meet the test.
You can deduct the following expenses:
The amount paid to pack and/or store your household goods and personal items.
The amount it costs to travel from your old home to your new home. This includes mover’s costs, transportation, and lodging along the way. You can’t claim the cost of meals during the move, however.
If you use your own vehicle during the move, you can either deduct the mileage traveled or the out-of-pocket expenses that you incurred during the move, such as the cost of gasoline and oil. The mileage rate is 16.5 cents per mile for calendar year 2010. You can add parking fees and tolls to either method.
You can’t claim expenses for which your employer reimburses you, or house-hunting expenses.
Use the Moving Expenses topic in the Adjustments section of the interview to report your moving expenses.
For more information, see IRS Publication 521, Moving Expenses.