When a move is closely related to the start of a new job, moving expenses incurred within one year of the job start date can generally be deducted.

The following 2 factors are used to determine the eligibility of deducting moving expenses:

1) Distance: The new job location must be at least 50 miles farther from the taxpayer’s old home than the taxpayer’s previous job location.

2) Time: Taxpayers must work full-time at their new job for at least 39 weeks in the first year of the move. Self-employed taxpayers must work full-time for a total of at least 78 weeks during the first two years at their new job site. If an income tax return is due before the time test is met, moving expenses can still be deducted if the time test is expected to be met.

If a taxpayer can deduct moving expenses, there are a few more deductions that can be claimed.

1) Travel: Taxpayers can deduct transportation and lodging expenses for themselves and household members that were incurred while moving from the old home to the new home. Mileage for car travel can be deducted at $.19 per mile (2016 rate). However, travel meal costs cannot be deducted.

2) Moving and Storing Household Items: Taxpayers can deduct the cost of packing and shipping your things. The cost of storing and insuring these items while in transit may also be deducted.

3) Utilities: The cost of connecting or disconnecting utilities can be deducted.

If a taxpayer is reimbursed for moving expenses by their employer, the reimbursement may need to be reported as income on their tax return.

There are some moving expenses that cannot be deducted. These include any portion of the purchase price of a new home, the cost of selling the current home, or the cost of signing or breaking a lease. Other examples of non-deductible moving expenses are:

the cost of new driver’s licenses
the cost of new car tags
mortgage penalties
house-hunting expenses
real estate taxes
the cost of home improvements needed to sell a home
the cost of cancelling memberships at fitness centers or other clubs

If an expense is deducted as a moving expense, it cannot also be deducted as a business expense.