There are times when moving can be a very expensive process. Examples of this include when you have a large number of things you need to move, and also when you are moving a great distance. For this reason, it’s always a good idea to do as much as you can to reduce how much you spend on the process. If you live in New York, using moving services from firms that provide very good value for money such as All The Right Moves Ltd is the obvious thing to do. However, there are other ways of saving that many people don’t know about, but which can help you save a lot nonetheless. One of these is by getting IRS tax deductions on account of the moving process.
How does this work?
The IRS provides a large number of tax deductions for various things, one of which includes moving. If you are eligible, you can use this to reduce how much tax you pay the next time you are supposed to do this. It might seem like an indirect and complicated way to reduce the cost of moving, but it tends to work well. Of course, you would need to apply for this deduction in order to get it, which is why it’s important for you to understand the basics of how the system works.
Who is eligible for such deductions?
There are a few things you need to fulfil in order to be eligible for this sort of deduction. These are:
• You should be moving for job-related reasons: The IRS will only refund part of your taxes if you are moving due to job issues. These include getting your first job, getting a transfer or getting a new job. In order for you to get the refund, you will need to prove that you were in full employment for 39 weeks or more in the area you are moving to within the first 12 months of moving there. Even if you change jobs a few times, you will still be able to claim this refund as long as you can prove that you were in full employment for the 39 weeks. If you are self-employed, the minimum amount of time you will need to have been in full time employment rises to 78 weeks within the first two years of moving there.
• The 50 mile rule: This is a criteria that many people misunderstand but which is fairly simple to understand. In order to get the tax deduction, the distance between your old home and your new job location should be more than 50 miles longer than the commute between your old home and the old job location.
If you are moving as a couple, at least one of you will need to meet both criteria in order to qualify for the deductions.
What is deductible?
In order for you to do the filing correctly, it’s important that you understand some of the things that are considered deductible. Some of these costs include:
• The cost of packaging and transporting the goods is fully deductible. This means that you can recover the whole sum.
• Costs associated with management of utilities.
• Storage costs for a maximum of 30 days.
• Lodging expenses after the household goods have been moved.
• Travel expenses e.g. the cost of fuelling your car, parking fees and tool charges.
You will not be allowed to claim the above deductions if the company is paying for the move. In addition to that, some of the applicable deductions will only be used for one trip involving moving your household goods or family members. For instance, if you have to make multiple trips to do the moving, the only travel expense claims you can make are for the first trip.