Tuesday, October 27, 2009

Moving Expenses: What Most Consumers Should Write-Off When Moving

By Kutis Ketchbaw

Though moving can be rather expensive, still, you might be able to deduct a substantial portion of the cost from your taxes! Unlike everyone else, you will not be dreading tax season. Still, there are a few rules that you should know when taking deductions.

If you relocate to another position in your company or start a new job, you'll be able to deduct many of the expenses on your itemized tax form. However, distance is critical as to whether or not you can deduct your moving expenses for tax purposes. Your new home and job must be at least fifty miles away from your old home and job.

A certain amount may be deducted if you travel to your new residence in your own automobile. Also, be sure to keep all the receipts, as tolls, fuel, repairs and maintenance are all tax deductible. In the course of your travels you may get credit for lodging and meals. If you choose to have the moving company ship your car while you take an airplane to your final destination, you can deduct the cost of moving your vehicle and the cost of your airfare on your tax return.

In case you decide to hire a mover, Uncle Sam allows you to deduct the expenses you incur in loading, unloading, pack and unpacking and the cost of lodging and meals while you're waiting for your goods to arrive. Unfortunately, you cannot deduct any lodging and meal expenses after you have unloaded your household goods in your new home.

If your goods are put into storage for a certain amount of time, some moving companies will give you a discount for this, while they wait for another load going to the same area. You can also deduct the cost of this if it's something you have to pay for.

A lot of companies will compensate a worker for at least some of the moving costs. In many cases, this may be credited to you as income, so, it is better to verify it before taking an action to claim tax. However, if your expenses exceed the amount your employer allows, you may deduct those costs. At this stage, it is imperative to hold on to all of your receipts and journalize your expenditures.

All moving charges, including extra charges from moving companies, and other expenses that exceed your employer's allowance can all be tax deductible. But you need to have your paper work in order, otherwise, forget about it!

The IRS also requires that you work for at least 39 weeks for your employer in the first twelve months after you move into your new home. And all moving expenses must have occurred within twelve months after you first report to work at your new location.

Tearing down and reassembling products such as hot tubs, ground pools, and jacuzzis is also tax deductible. You can even deduct the tip you give the driver!

So, when you are in the middle of checking out moving companies and doing all of your packing, don't forget to also look into the impact that moving will have on your taxes. Your efforts may result in a sizeable deduction!

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