Moving in itself can be an expensive affair; moreover, you need to remember many things: sell, organize, buy, and pack. If your move is for a new business or a job, it becomes even more important that you arrive for relocation in a calm frame of mind. Did you know that you could deduct certain moving expenses for tax relief? Here are a few things you should be aware of.
You can easily claim your moving expenses as tax deduction, if you fulfill the following criteria:
The new work location should be a minimum of 50 miles away from your previous house in comparison to your previous job location. In case this is your first job, it should be at least fifty miles away from your previous home.
If you have a new job, you must be ready to work on arrival at the new location for at least 39 weeks full-time during the first twelve months. In case you are self-employed, you should meet this requirement and work for a minimum of 78 weeks in the first two years. Moreover, you must be in the area of your current location.
In order to claim the moving expenses incurred you should submit the personal tax return that covers the year of the move.
You’re expected to keep proper and correct records of moving expenses including, mileage logs and receipts. It is always safe to make use of a reputable moving service provider.
The Internal Revenue Service, the nation’s tax collection agency, requires that your employer provide detailed breakdown of every cost incurred. Make sure that the moving agency offers detailed estimates with no ‘extra’ surprises.
Your employer will ask you to engage an affordable mover to keep the expenses low. You must not forget to get at least three quotes to show the employer that you have done your research and have made the right comparisons and the right choice.
Expenses eligible for deduction
The cost incurred while traveling. If you travel using a car to your destination, you may be able to claim the actual expenses like gas and oil or utilize the average allowance scale of twenty-three cents per mile. Whatever the method you employ, you’re permitted to deduct tolls and parking fees but not insurance or general repairs of your car.
Lodging such as accommodation close to your previous home within a day after vacating your old home; plus accommodation for the day you arrive for relocation. However, lodging and travel expenses do not include food or meals.
Insurance and storage charges of household goods and personal items within one month after shifting from your previous house, and before moving to your new location.
While shifting can be a tedious task, you can certainly recover some of the expenses by taking advantage of the tax laws.