AZ Brothers Moving Expense Worksheet
Every year, people move for a variety of reasons. Whether because of school, work, or business, we pack our bags and move our families miles away from home. Such moves can be extremely expensive.
Many people struggle with recovering their finances afterword. The long-term effects can also be a source of worry. More so when tax season is just around the corner. az brothers tax deductible moving expenses worksheet
Maybe you’re wondering what moving expenses can be deducted from your taxable income? Can such expenses go toward lowering your tax liabilities?
In the following article, we discuss what moving expenses are tax deductible. Read on to download our free moving expense worksheet to fill out.
Learn how to deduct your expenses from your taxes hassle free.
Important Things to Keep In Mind
One way to do this is to keep a Cash Flow chart. Keep track of what you spend and what you receive during your move.
Employer reimbursements for the move would count toward your deposits. You will need to keep track of the reimbursement for tax purposes.
Keep all of your receipts. How you do this is up to you. You might scan your receipts and save them to your computer.
You might keep them in an envelope or folder. You could also take pictures of them on your phone. It may help you to make a hand-copy of the receipts on another slip of paper.
However you decide to keep track of them, make sure you are consistent and accurate.
Once you move in remember that you must change your address with the IRS. If you don’t your tax returns will go to your former address.
There are multiple ways to change your address:
- Change your address when you file your taxes the following year
- Send a Written Statement to the IRS with your full name, old address, new address, and social security number
- Call the IRS and tell them your new address
- Fill out IRS Form 8822 Change of Address or Form 8822-B Change of Address or Responsible Business
The Distance Test Qualification
You must pass two tests to qualify for tax deductions on moving expenses. These tests are required by the IRS. The first is the Distance Test. Moving in the same town will not qualify for this test.
The distance between your new job and your old home must be 50 miles farther than your old job was from your old home.
For instance, say a couple is moving to Flagstaff from Phoenix. Their old home was 25 miles away from their old house. Their new house is at least 144 miles from their old job.
The difference between 144 and 25 is 119 miles. Since 119 miles is greater than 50 miles, the couple would qualify for tax deductions.
Now let’s say the couple is moving from Peoria to Scottsdale. They work 10 miles from their old home. Their new home is 40 miles from their previous work.
That creates a difference of 30 miles, which is below 50 miles. Therefore, this couple would not qualify for tax deductions.
In these calculations, you must use the shortest commute route possible.
The Time Test Qualification
To qualify for tax deductible moving expenses, you must begin working in your new location quickly.
The IRS requires a minimum of 39 weeks of full-time work within a year in order to qualify for deductions. This period begins the day you move into your new home.
However, the weeks do not have to be consecutive. The IRS also does not have any specific definitions of “full-time”. Instead, they base it on the standards of your new employer.
Special Circumstances
There are some circumstances that exempt you from passing the Time and Distance Tests:
- International Moves: If you are moving abroad, the IRS assumes that you qualify for the distance test.
- Victims of Natural Disasters: Relocating after a natural disaster can take a lot of time. No one can predict when they will hit. The IRS understands that these circumstances are out of your control.
- Military Moves: These moves are exempt from passing the tests only if they are a Permanent Change of Station.
Tax Deductible Moving Expenses
The IRS has many moving expenses that it counts toward tax deductions. In general, the deduction covers anything within reason. Such expenses include:
- Travel Expenses: cost of lodgings, commercial transportation, vehicle expenses
- Transportation Expenses: cost of moving companies, packaging and boxes, shipment of other vehicles and/or family pet
- Storage Units: only up to 30 days
Anything that directly impacts your finances because of moving can be deducted from your taxes.
Non-Deductible Expenses
It may be easier to understand what is deductible by knowing what is not deductible. Items include but are not limited to:
- Expenses of new home
- Car tags/insurance
- Furniture purchases
- Vehicle maintenance
- Home improvements to sell previous home
- Remodeling of new home
- Temporary living expenses (apartment rentals)
If the expense is not made in the move itself, then it is most likely not deductible.
How to Claim Your Deductions
Knowing what you can claim can only get you so far. Knowing how to claim your deductions is essential to lowering your tax liability in the future.
When you file your next tax return, simply attach IRS Form 3903 to your tax returns. Some tax filing programs will walk you through filling the form out. Some automatically fill the form out for you.
You can also fill out AZ Brothers Tax Deductible Moving Expenses worksheet and take it to your accountant.
Even without the worksheet, an accountant will be able to help you determine what you can deduct based on your moving expenses.
Our Moving Expenses Worksheet
AZ Moving Brothers provides you with a free worksheet to determine what items are tax deductible. The worksheet allows you to fill out your spending.
If the math scares you, never fear. Our worksheet will total your spending up at the very end. Use the worksheet to keep yourself organized and keep track of your spending.
Making the Move
The Tax Deductible Moving worksheet will alleviate any misgivings you have about moving. Knowing what you might get back from taxes helps determine your overall costs for moving. However, you still need to make the move.
You may decide that utilizing a moving company can save you some money. If so, contact AZ Moving Brothers for an estimate. They are a family-owned moving company with extensive experience in the Phoenix area.