Relocation: Tax Implications Of Moving
by author on Mar.28, 2010, under Main Articles
No matter how much trouble and stress moving is, still it has some tax advantages. So, this tax season may turn out to be profitable for you. Still, be aware of the fact that when taking deductions you are subject to a few rules.
If you relocate to another position in your company or start a new job, you'll be able to deduct many of the expenses on your itemized tax form. Still, distance is important, because you can only deduct your moving expenses if your new home and job are at least fifty miles away from your old house and employer.
If you drive your personal vehicle to your new home, you can deduct a certain amount per mile traveled. Also, be sure to keep all the receipts, as tolls, fuel, repairs and maintenance are all tax deductible. In the course of your travels you may get credit for lodging and meals.
In case you decide to hire a mover, Uncle Sam allows you to deduct the expenses you incur in loading, unloading, pack and unpacking and the cost of lodging and meals while you're waiting for your goods to arrive. Unfortunately, you cannot deduct any lodging and meal expenses after you have unloaded your household goods in your new home.
If your goods are put into storage for a certain amount of time, some moving companies will give you a discount for this, while they wait for another load going to the same area. You can also deduct the cost of this if it's something you have to pay for.
A lot of companies will compensate a worker for at least some of the moving costs. As this may be credited to you as income, check with your tax preparer before you claim it on your taxes. Still, expenses far above what your company sets up are tax deductible. This is why it is extremely important to keep all receipts and document everything possible!
Remember, food, accommodation, airfares, tolls, costs incurred when moving (including extra charges made by cross country movers), and other expenses that your employer's expense allowance doesn't cover are all tax-deductible. But if you don't have documentation in the form of receipts, you're out of luck!
It is also required that you work for at least 39 weeks for your employer in the first twelve months after you move into your new home. And all moving expenses must have occurred within twelve months after you first report to work at your new location.
Tearing down and reassembling products such as hot tubs, ground pools, and jacuzzis is also tax deductible. It is also possible to deduct the cost of tipping the driver!
To sum up, while you're doing your homework and reading moving company reviews, getting estimate moving costs from different moving companies and organizing your packing, be sure to research the tax implication of moving.