Relocating Can Be Tax-Deductible
Our customers turn to us because we know a few things – like how to load a truck without breaking anything, or having anything break while that truck is rambling on down the highway.
But tax advice? Who would expect us to offer any of that?
Probably no one.
But as our friend Tony Nitti over at Forbes tells us, “Section 217 of the Internal Revenue Code provides a tax break for those who move residences in limited situations.”
Tell that to your next customer and see how they react.
Understand this: we are NOT suggesting any of us turn tax consultant! (We’ll leave that to the scrawny guys with the calculators.) But surely a certain percentage of people have no idea they can deduct their moving expenses when it’s time to face the IRS. The least we can do (and maybe the most we should) is simply let those certain customers know what we’ve learned, and suggest they look into it for themselves.
Mr. Nitti gives us a head start by explaining (in detail, with extremely simplified examples) exactly who would qualify for a tax break for moving. Here we’ll break it down into even smaller bites.
To deduct your moving expenses:
- You need to be moving for work. (Interestingly, this could include moving to Hawaii because you want to live there – but then you do in fact also have to work there.)
- You need to be starting your first job, starting a new job, continuing the same job at a new location or working again after being unemployed. (This seems to include just about anyone not doing the same old same old.)
- Your new job has to be at least 50 miles further from your home than your old job. (It doesn’t matter which direction.)
- You have to work full-time for at least 39 weeks of the first year after your move, or twice that number over the first two years if you are self-employed. (So you have to hold onto that gig at the Maui Surf Shop.)
- Nitti adds the all-important caveat that #4 “does not apply if you are disabled, fired (other than for willful misconduct), transferred, or, quite logically, if you die.” (Hey, this is the law, we have to be specific.)
And as far as what expenses are deductible? Basically speaking:
- All expenses directly related to the packing, crating, moving and shipping of your household goods
- All travel expenses between old and new residences – although only along the most direct route (no side trips to Vegas) and for reasonable expenses (forget deducting the cost of your presidential suite at the Hilton)
- Costs of food and lodging while in transition into your new residence, and
- Costs of moving other immediate family members (provided they don’t take a detour to Disneyland)(or Vegas).
Our customers hire us because they want to save a few bucks while they get the help they are looking for. We can give them a little extra something by mentioning how they can do even better next time they are in touch with Uncle Sam.
Just tell them that if they have any questions they can contact Tony Nitti.