When thinking about an upcoming move, few people take the time to consider how a move can impact the filing of their tax return. The fact of the matter is that there are many costs associated with moving that could serve as deductions the next time you file your taxes.
Here are three things to keep in mind about moving and tax deductions as you prepare to relocate in the future.
1. Your move must be long-distance.
In order for your moving-related expenses to qualify as deductions on your tax returns, you must be making a long-distance move. The IRS requires that anyone claiming moving expenses on their tax return prove that they have relocated for a job that is at least 50 miles or more from their previous residence.
If your new home meets this distance requirement, be sure that you keep all receipts related to your moving expenses so that you can deduct these costs when you file your next tax return.
2. You can only deduct qualifying expenses.
In order to ensure that your next tax return is accepted without any problems, you should be sure that the moving-related deductions you are claiming qualify. The IRS allows you to deduct expenses like the cost of paying a professional moving company to pack and transport your belongings and the cost of traveling from your old home to your new home.
Expenses related to registering your vehicle in your new city or state, subsequent return trips to your old home, and any pre-move househunting costs are considered nondeductible. Knowing which types of moving-related expenses can be deducted will allow you to more efficiently prepare your tax returns following a move.
3. Only one spouse needs to qualify.
If you are married, you likely file a joint tax return. When claiming moving-related expenses as deductions on your taxes, it's important to recognize that if one spouse meets the eligibility requirements set forth by the IRS, both spouses can deduct the expenses on their joint tax return.
Be sure that you are keeping track of all receipts showing how much you paid for moving-related services so that your accountant can help you get the maximum deduction in the future.
Moving can be an expensive task, but knowing that you can deduct some of your moving-related costs on your next tax return can help make the cost of a move less stressful. Be sure that you take the time to educate yourself about the deduction of moving expenses to take full advantage of the benefits these deductions can provide in the future.
For more information, contact Wheaton World Wide Moving or a similar company.