Write Off Your Moving Expenses
You may be able to write your moving expenses as a tax deduction. While government regulations are more difficult than they used to be, it is still possible to catch a break if you meet the following criteria:
The required length of time is waived in cases of a new job for members of the armed forces, those transferred by an employer, those who lost a job through no fault of their own, and those returning to the United States from abroad when they retire (or their survivors).
Instead of being included in itemized deductions, expenses are deducted directly from your adjusted gross income. You may then take a standard deduction if it’s to your advantage.
Qualified tax deductions include:
No longer allowable: $3,000 more for up to 30 days’ temporary living expenses, house hunting trips and costs of selling an old home and buying a new one.
For most taxpayers, expenses are deductible in the year you paid them, regardless of when you incurred the expenses.
If your employer pays for your move, these payments of qualified moving expenses are excluded from your taxable income and should be noted with a code P in box 12 of your W-2. Beware: some employers pay the cost of items no longer allowed (temporary living expenses, house hunting trips, costs of selling a house), and those amounts must be included in your taxable income. Your employer should add them to Box 1 of your W-2. Even if your employer is ignorant of the current standards, you are responsible include the payments in your taxable income and pay taxes on them accordingly.
In order to write off your relocation costs, you have to use the long Form 1040 to claim them. You don’t need to itemize any other deductions. The costs are detailed on Form 3903 and the total transferred to line 27 of your return. You don’t need to complete Schedule A, meet any percentage-of-income thresholds, or deduction phase-outs.
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