The new Tax Law states that from 2018, moving expenses deduction will only be available to some military personnel. However, if you have relocated in the years prior to 2018, we have some good news for you! In some cases, Federal Tax Law allows you to get a refund on certain moving expenses if your relocation was business-related.
Therefore, if you have started a new job, relocated your office or started working for the same employer but on some other location, you are eligible for moving expenses deduction. Unfortunately, not all expenses are deductible, and they depend on a couple of criteria.
What Are Moving Expenses?
Moving expenses are defined as the costs incurred for packing and shipping personal belongings to a new location. These expenses also encompass storage fees and transportation costs, including fuel expenses. It is widely acknowledged that moving expenses can accumulate to a significant amount.
Hence, if the relocation is job-related, it is advisable to explore the possibility of obtaining reimbursement. However, it is crucial to exercise caution and ensure compliance with the necessary requirements to qualify for a deduction.
The Distance Requirements for Moving Expenses Deduction
Wouldn`t it be perfect if there were no limitations, and you could get a deduction for any and every relocation? Unfortunately, that is not the way life works. There are some criteria which must be met if you are to get a deduction. And, they start with the distance traveled.
If your knowledgeable office movers in NYC have relocated you in the same city, we are sorry to inform you that you will not be eligible for a deduction. The rule is that your new place of work must be 50 miles farther than your old house. Fifty miles is not a small distance, by no means. Therefore, if you think, or know, that there are 50 and more miles from your job and your last home, feel free to ask for a deduction.
Also, when measuring the mileage, the IRS will make sure you use the shortest route. They want to be sure you are doing everything by the book.
The Time Requirements
Beware, because there are a lot of small restrictions here. If you do not meet even one of them, you stop being a candidate for moving cost deduction.
- To qualify for moving expenses deduction, you must be working for at least 12 months. There is no requirement for you to work for only one employer. Thus, if the need arises, you can divide your time between a couple of them.
- You must be a full-time worker for at least 39 weeks during that first year.
- Luckily, there are no requirements to how many days and hours you work, as long as you fulfill the norm of your industry.
Big Apple Movers advise you to check everything before you start thinking about moving cost deduction. These rules cannot be bent, and there is no way of getting around them.
Deductible Moving Expenses?
Luckily, there is not a shortage of moving expenses that can be deducted. However, there is a difference between short distance moving and moving interstate, or even abroad. If you had a DIY move and short distance move, and you have transported your furniture by yourself, you can get a deduction for gas, oil and even highway tolls. When accumulated, these expenses can produce a significant amount of money, so it would be good to get some of that money back. On the other hand, if you had a long distance move, you could get a reimbursement for the plane tickets, and the best thing is that this deduction applies to the whole family.
Moreover, if there was a need for you to rent cheap storage NYC, you should know that you can also be deducted for these expenses, as well. However, there is a limit, since this deduction only applies to periods of up to 30 days. Therefore, if you had to use a storage unit for more than a month, you will not be able to deduct it from your moving expense.
How and When Can You Claim a Deduction?
Moving expenses deduction is a unique one. Why is this the case? Namely, you can claim this deduction even before you are sure that you satisfy all of the requirements. However, it is not the most recommendable course of action. If at the end of those twelve months, you have failed to meet one or more requirements, you will have to return the deduction. Have in mind that most taxpayers usually fail to meet the criteria, and they have to return the money once the 12-month period ends.
To claim a deduction is easy. All you have to do is report your expenses on IRS Form 3903. Attach that form to the tax return for the year when you moved, and the process is over. If it turns out you have to return the deduction, you can do it in two ways.
- For your next tax return, make sure to include the original amount of your moving expenses deduction.
- Calculate your tax without including the moving cost deduction.
If you are not good with taxes, it is never a bad idea to seek professional help. The IRS will not be lenient if you make any mistakes with your taxes. Avoid trouble whenever you can!
If you think you could qualify for moving expenses deduction, you should give it a try. However, be careful, as you might have to return everything at the end of the year.
