Did you know that moving residences can be written off as a tax-break when the move is work related? Once it's decided that the move is work related, a time and distance test must be determined. Once these requirements have been fulfilled, a relocation can be used to write off of taxes. To do this one must fill out a Form 1040 to claim moving costs but one doesn't have to claim any other deductions.

One of the biggest challenges in trying to deduct a move is the distance test. The new workplace must be located fifty miles farther away than the old workplace. This is to ensure that people are not just moving to cut back on their commute while at the same time getting a tax cut. That means if one used to live ten miles away from their job, the new job must be sixty miles away for the move to be tax deductible. The distance must also be calculated using the shortest possible route to get there.

There is also a time requirement that needs to be met in order for the move to be tax deductible. The first component to the requirement is that the move must be made within one year of starting the new job for it to be tax deductible. The person must also be working for thirty-nine weeks during the first twelve months of living in the new location. These weeks do not need to be consecutive and do not even need to be for the same employer. If the person is self-employed the only difference to these requirements would be that they must work for seventy-eight weeks during the first twenty-four months.

Once you have met these requirements, it's important to know what is considered tax deductible and what it not. Also, one must be able to prove that they made all purchases and have paid for everything in full so it's extremely important to keep all receipts that are made during the move. Deductions will usually be made for the cost to move household and personal items, some fees including storage and insurance, and utility connection and disconnection charges. Lodging and traveling expenses near the old or new home may also be covered as are the shipping charges of a vehicle usually. Even pet travel arrangements are sometimes covered for any fees associated with this.

If a couple is married and are filing their taxes jointly, only one of the partners needs to be able to fulfill the time and distance requirements. However, couples cannot combine the number of weeks worked to meet that requirement. It's also important to keep in mind that any moving expenses that will be paid for by the employer will not be tax deductible. If moving expenses are deducted but the time requirement is not fulfilled, the person must file an amended return or include any deductions with their income tax the following year.

Jeff - Orlando Real Estate