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Did You Move in 2016? Tips for Preparing for Tax Season

Did You Move in 2016? Tips for Preparing for Tax Season

December 15, 2016 By King Relocation


Did You Move in 2016? Tips for Preparing for Tax Season

Did you know? If you moved during 2016, you may be able to deduct some of your relocation expenses on your 2016 federal income tax return. Regardless of whether you moved to start a new job, were transferred to a new city or state by your employer, or returned to the U.S. to work or retire after living abroad, the costs associated with your relocation can help reduce your tax burden.

However, before you start filling out your tax return, keep in mind that Uncle Sam does have a few rules that must be followed when deducting moving expenses. And, not all relocation-related expenses will qualify. To find out which expenses do qualify, a good place to start is with IRS Publication 521, which offers guidelines and criteria for deducting moving expenses from your tax return.

To begin with, your relocation must meet the following criteria:

  • • It closely relates to the start of work. You can consider moving expenses incurred within one year from the date you first reported to work at the new location.
  • • It meets the distance test. The distance between your new job and your former home must be at least 50 miles farther than your previous workplace is from that home.
  • • It meets the time test. If you’re an employee, you must work full-time for at least 39 weeks during 12-month period after you arrive in the general area of your new job location. The weeks worked need not be consecutive, or for the same employer. If you’re self-employed, you must work at least 78 weeks during the first 24 months after moving, including at least 39 weeks during the first 12 months.

If your relocation passes the “time” and “distance” tests, you then you can start looking at which moving expenses will qualify for an IRS deduction, and which ones will not. Here are some examples of qualifying expenses:

  • • Travel: Costs for you and your family (by the most direct route available by conventional transportation) to travel to your new home, including one day’s lodging (excluding meals) along the way. Travel also includes the use of your vehicle during the move, either by claiming actual expenses, or by claiming the standard mileage rate of 23 cents per mile. For either method, you can add parking fees and tolls.
  • • Relocation Services: The cost of packing and transporting household goods, personal effects, pets and vehicles. This includes fees paid to professional packers and movers. Note that the cost of moving personal belongings from a location other than your old residence, such as a summer home or a relative’s home, is limited to the amount it would have cost to move them from your previous home.
  • • Storage: Storing and insuring your possessions for up to 30 days after they leave your former home but before being delivered to your new home, in the event that there is a delay before you can move in.
  • • Utilities: Fees to disconnect and/or connect utilities at either end of the move.
  • • Domestic vs. International Moves: You may deduct expenses regardless of whether you’re moving within, to or from the U.S., although special rules for calculating moving expenses outside the U.S. apply. See IRS Publication 54 for details on international moves.

Remember to keep copies of receipts, bills, cancelled checks, credit card statement and mileage logs related to your relocation. You should also save your Form W-2 and statements of reimbursement from your employer so that you’ll have all of the documentation you need regarding your relocation on hand when you go to complete your tax return.

Also, please keep in mind that this article is meant to be used for informational purposes only. We recommend that you always consult your tax professional or attorney when making deductions for relocation expenses on your tax return. The IRS provides information on their Website as to how to go about deducting these expenses from your tax return. You can also find additional guidance for this process via the aforementioned IRS Publication 521.

About King Companies
As an agent of United Van Lines, King Companies has the resources and expertise to be your “go-to” resource for all relocation needs. Whether you are relocating your household, moving an office, or are in need of logistics services, we strive to ensure that your next move will be the best you will ever make. Call us today at 800-854-3679 to learn more.

We hope that you will consider King Companies for your future relocation needs. To learn more about our services, visit is at www.kingcompaniesusa.com. And, don’t forget to connect with us on Twitter, Facebook and Google+ for our latest news and updates!

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