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Moving Expense Deductions
Ever wonder if moving expenses can be a tax write-off? Well, actually they can in the case of a change of employment move. If your employment requires you to move to the fantastic Raleigh/Triangle area then you will be pleased with the tax saving opportunities associated with your move. There are stipulations, however, to determine if the expenses can be written off.
Deduction Reason #1
In order to take advantage of a moving related expense a certain driving distance is required. This means, the distance from the old home to the new job must be greater than the distance from the new home to the new job. However, there are some exceptions to this rule. If the move to the new location in the Triangle area is required as a condition of employment, as in the case of a government job requiring an official to live in the same community they are working in. For example, a teacher, fire official, politician, etc… Another exception applies when less money or time will be spent traveling from the new home to the new job. This could occur if the new move puts you closer to Raleigh’s public transportation, which there was no access to before and the costs of getting to work are now cheaper.
Deduction Reason #2
Another reason for moving expenses to be a tax write-off is when the distance to the new job from the old home increases by at least fifty miles. Meaning, if you are moving in from another state to the Raleigh/RTP area or from another part of the state and the distance from that home to the new job is over fifty miles then the move can be deducted.
Deduction Reason #3
In order to deduct the moving expenses the mover must begin working in the new location within one year of moving. However, it is not necessary that the employment be obtained before moving to the new location. Although, the one year time period can be extended for a few reasons. One of those being that the move is delayed so a child can remain and finish the school year in the old residence location.
Deduction Reason #4
To deduct the moving expenses, there is a requirement of amount of time worked at the new job. The mover must be employed at the new job on a full-time basis for at least 39 weeks of the first 12 months after moving. If the mover is self-employed, then he/she must work 39 weeks during the first 12 months and at least a total of 78 weeks in the first 24 months after the move. If the person moving does not meet this condition, a spouse’s time can be used to fulfill the requirement. However, the spouse’s time cannot be added together with the person moving for the job to meet the standard.
How the Deductions Are Used
The deductions are all considered “above-the-line deductions.” This means that they are deductible despite being itemized or not. Writing off a trip from the old residence to the new is allowed only once per vehicle in the family. The mover may either use the cost of fuel and oil or a standard mileage rate, depending on Raleigh’s tax laws.
Understanding It All
Moving can be stressful enough, but when interpreting tax laws for moving is added, it can be overwhelming. To make this process easier, let the knowledgeable real estate experts with the Linda Craft team help you understand them all. Linda Craft’s group can assist with any part of the home buying, relocation, home selling or tax explaining process. Contact them today to make your relocation much, much easier.