Thursday, October 2, 2008

Are you Moving?

Congratulations on your new even get to move to a new could qualify for a tax deduction from your moving expenses. If you have recently moved to a new city for a new job or because your current company has moved it's operations you may qualify for a tax break on your moving expenses. The main factors are how far you moved and how much time you spend on the job. If it is a short-time or part time job or if the move is relatively local you may not qualify.

Your new job must meet the "mileage test" which states that the new job must be 50 miles further away from your home than the old job was. For example, if you drive 3 miles to work on your current job, your new job location must be 53 miles away from your home.

You must also meet the "time test" which states that you must maintain Full Time Employment for at least 39 weeks during the 12 months immediately after the move takes place and 78 weeks of the 24 months immediately following the move. How do you determine that if returns are due before this can be verified??? You can still deduct the expenses even if you have not met the "Time Test" qualifications before your return is due if you realistically expect to meet those guideline requirements. If you are a military personnel and your move occurs because of a permanent change of station you do not have to meet these requirements.

How much can you deduct? You can deduct the expense of moving your household goods and personal items as well as the expense of traveling to your new home which includes lodging. However, no part of the purchase transaction can be deducted as a moving expense. Make sure you take advantage of these deductions in order to save you money on your returns. Also make sure you maintain documentation of all moving expenses with a copy of your tax returns. This will keep you in line later if the IRS decides to audit any of your returns.

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