Tax-deductible moving expenses
There is no person who enjoys the process of moving, but we all have to do it at least once in a lifetime. Did you know in case of moving to Pennsylvania you can claim for tax-deductible moving expenses? Even if you didn’t have a job before moving or you start working after moving, you may be able to claim moving expenses. How to do it? Take a look at our guide and check if you qualify for tax-deductible moving expenses.
Not everyone qualifies for tax-deductible moving expenses
Not everyone will qualify for tax deduction. But, on site of the Internal Revenue Service, you can check all the rules about tax-deductible moving expenses. There are two main rules one is the “distance test” which requires your new home to be located at least 50 miles further than your prior work location was from your old home. In case you don’t have an office, or you have worked from your home before the move, then your new job has to be at least 50 miles from your old home if you want to claim moving expenses.
Not All Expenses Qualify
If you want to qualify for tax-deductible moving expenses, you need to know what costs are included. Costs for packing and shipping your household goods and personal items are included in qualifying expenses, same as costs for travel. But, meals during your move aren’t deductible as moving expenses.
Who can claim the moving expenses deduction?
There are three tests which determine who can claim the moving expenses deduction. We bring you the rules of these three tests, so you know if you can claim the moving expenses.
The “Closely Related to Starting Work” Test
If you want to claim the moving expenses, you have to relocate within one year when you first report to work at your new job location. It means, if you start working within one year when you moved, you can meet the “closely related to starting work” test.
There is also another way to meet “closely related to starting work” test, in case you want to move your belongings within one year after you start working at your new location.
The Distance Test
If you want to satisfy the distance test, your new location must be at least 50 miles farther from your former home. So, you should measure the distance between your previous home to your new workplace. Also, you have to measure the distance between your previous residence to your old workplace. If your first measurement is at least 50 miles longer than the second one, your move satisfies the distance test, and you can qualify for tax-deductible moving expenses. But, there is one exception to this rule. Military members who are on active duty can apply for tax-deductible moving expenses even if they don’t meet the distance test because of a permanent change of station.
The Other Time Test
If you want to satisfy this test you have to work at your new location long enough. What does it mean? How can you satisfy this time test? There are two ways:
- You are working full-time for least 39 weeks during the 12 months following your move
- If you’re employed regularly as a worker for a minimum of thirty-nine weeks throughout the primary twelve months following your move or a minimum of seventy-eight weeks throughout the 24-month amount following the move.
Also, there are few exceptions to these rules.
- Active military member who are relocating due to a permanent change of station
- People who moved abroad for work and relocate back to the U.S. to retire
- Surviving spouses of persons who worked abroad and relocated back to the U.S. after their spouse’s death
- People whose job at a new location ends because they became disabled or died
- People who moved to another location for their employer’s benefit don’t have to meet this test.
What deductible expenses include?
To satisfy the rules of tax-deductible moving expenses, you need to know what things are included in this process.
Transportation expenses for you and your family while relocating with moving companies in PA from one place to another can be eligible. Like we mentioned, the cost of meals during the move are not the part of tax-deductible moving expenses. Deductible expenses also include the rental of a moving truck. So if you want to apply for the deduction, keep receipts for tolls, gas purchases, and hotel charges.
Packing Materials and Shipping
If you want to cut Pittsburgh moving expenses, you should hold the receipts from any moving and storage Pennsylvania companies you use for your relocation. It also applies to boxes you purchase, because all the costs for packing, crating and transporting are deductible. You can also include the cost of storing your items while they are in transit. Also, the costs of moving your pets can be deducted. So, the list of deductible costs looks like this:
- Hiring Movers
- The costs for connecting or disconnecting utilities
- Vehicle shipping
- Shipping household pets
- Storage and insurance during the transition
- The cost of using a rental truck
- Travel by air or train for long distance moves
The list of Non-deductible moving expenses
The following expenses cannot be deducted for a move:
- Part of the purchase price of your new home
- Car insurance
- Car tags
- Driver’s license
- Expenses of buying or selling a home
- Food expenses/meals
- Furniture purchased for the new home
- General vehicle maintenance
- Pre-move house hunting expenses
- Real estate taxes
- Remodeling a new home
- Security deposits
- Storage charges more than the 30-day period
- Temporary living expenses
- Tips for the movers
Important things to know before deducting moving expenses
- Keep all receipts and records
Gather all receipts, statements, bills, the Bill of Lading and any other documents if you want to apply for tax-deductible moving expenses.
- Change your address with the IRS.
Make sure to complete the form 8822 to ensure you receive any official correspondence.