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Tax breaks for job-related moving expenses: don't miss out on these deductions.

If you're planning a job-related move this fall, you'll be delighted to know that some of the costs are tax deductible. From 2012 to 2013, 35.9 million people moved, according to the U.S. Census Bureau, Current Population Survey, 2013 Annual Social and Economic Supplement. Among those who moved, 19.4% relocated to start a new job.

They may have been able to deduct many of the costs of moving when they filed their tax returns this year. Anisha Bailey, an enrolled agent and founder of Taxley, a new tax education website (, says that if you're seeking advice about a tax break for a job move, your best bet is to consult an enrolled agent. "All enrolled agents specialize in taxation. All of our education is focused on tax law. We are governed by the Department of the Treasury as opposed to the individual states. We can work with clients no matter what state they live in because we have a federal license," says Bailey, who has been a tax professional since 2007 and an enrolled agent since 2012. If you opt to go the DIY route, you can also use tax software such as TurboTax.

Tax Tips for Your Next Job Move

Bailey offers some job-relocation advice:

1 You have one year to take the deduction. "First, the relocation has to be related to the start of a new job," says Bailey. "Your deductible moving expenses are generally those incurred within 12 months from the date you first report to work at your new job."

2 You must pass a "distance test." If you don't like tests, you're out of luck. "You have to meet what's called a distance test. The new job location must be at least 50 miles further from your former home than your former job location. In other words, if your former job was 10 miles from your former home, then your new job must be a minimum of 60 miles from your former residence," says Bailey.

3 You must pass the "time test." After you move, the Internal Revenue Service requires that you work at your new job full time for a minimum of 39 weeks in the first year. Business owners must work full time for a minimum of 78 weeks during the first two years at the new job location. "If a business owner doesn't meet the requirements, they'll have to amend the return in which they took the deduction or add it as income on their current year's return," says Bailey, who also notes that there are exceptions to the test.

4 Use the appropriate forms. If you're taking a moving expense deduction, use Form 3903, Moving Expenses, in addition to the regular Form 1040. You can get this form at the IRS website or from your tax preparer.

5 Familiarize yourself with the qualifying expenses. Any expenses related to the moving of household goods and personal items will qualify, even expenses related to moving your pet. "So whatever shipping costs are incurred would be eligible. You can also deduct lodging. Say, for instance, you're driving from New York to a new job in Florida and you stay at a hotel during part of your trip. You can deduct the cost of that hotel stay," Bailey says. You can also deduct certain travel expenses such as parking and tolls, plus either the cost of gas and oil or the standard mileage rate for moving, which is now 23.5 cents per mile. "Choose the method that yields the highest tax deduction. You can either deduct the actual costs of using your vehicle, or use the standard mileage rate. Airfare is also deductible. However you choose to move is up to you."

6 Familiarize yourself with expenses that do not qualify. Meals or vacations taken during the trip for the job move are not deductible. "Maybe you had a night out or the kids wanted to go to Disney World, but you can't deduct that. Also, if your moving expenses are already covered by your employer, you cannot double-dip. The only thing you can deduct is expenses that you incur and money that you pay for those expenses."

Old Home

Old Workplace 3 Miles

New Workplace 38 Miles

Distance Test is Not Met New job location is less than 50 miles further from former residence than former job location

New Workplace 58 Miles

Distance Test is Met New job location is at least 50 miles further from former residence than former job location



Managing Credit Card Debt

If you're having trouble managing your credit card debt, your first step should be to call your creditors to explain why you are having difficulty keeping up with payments. If your problem is more of a long-term issue, seek the services of a certified credit counselor. You can find one by conducting a search on the National Foundation for Credit Counseling website ( A certified credit counselor can offer workshops and educational materials and can help you develop a budget. Before signing up with a credit counseling agency, check with the Better Business Bureau and your state's attorney general to see if any complaints have been filed against the organization.

CONTACT SHEIRESA NGO at or @SheiresaNgo.
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Title Annotation:TAXES
Author:Ngo, Sheiresa
Publication:Black Enterprise
Geographic Code:1USA
Date:Oct 1, 2014
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