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Can moving expenses be deducted?

In November, tax season may not be on anyone’s mind. After all, the holiday season is just around the corner, so most people are concerned about where they will be travelling for Thanksgiving or Christmas, and whether they have to prepare for extended family to spend time with them. Nevertheless, people are still apt to relocate before the end of the year and it is important to understand that moving expenses could be tax deductible.

For the uninitiated, moving expenses may be deducted if you relocate because of a change in your job or if you moved to start a new business. However, the move must satisfy some important criteria, which will be highlighted in this post. 

Your move qualifies under the distance test – Your new job or business must be at least 50 miles away from your previous domicile. If you were previously out of work, your new job must still be at least 50 miles away from your previous residence.

The move closely relates to the start of your new job – Essentially, expenses attributable to the move must have been incurred within one year from the date you start work at your new business or job in order to be deducted on your tax return.

You must work the qualifying number of hours – This means that you must work at least 39 weeks within the first 12 months of relocating. Self employed individuals must work 78 weeks within the first 24 months after a move in order to deduct moving expenses. 

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