Relocating is can get pretty expensive, especially if you’re moving far away. The bright side is that the Internal Revenue Service (IRS) provides relatively generous tax deductions on your federal income tax return. Your move must meet two criteria to qualify for a tax deduction: The move should be directly related to your primary job (according to the IRS time test) and should meet the IRS’s 50-mile distance test.

The distance test

The 50-mile test is the key factor for determining whether your move will qualify for a tax deduction. This test measures the actual distance between your new place of employment and your former principal residence. The distance between your job and former residence must be 50 miles or more than the distance of your previous commute. For example, if you previously lived 40 miles away from your old job, your new job must be at least 90 miles away from your previous residence to qualify your move under the distance test.

The time test

The IRS’s time test checks that your job is the main reason for moving. The first part of the test requires you to start your new position within 12 months of your move date. The second part asks that you work full-time at your new job for at least 39 weeks during the first 12 months after your move date. To qualify, you don’t need to work for the same employer for all 39 weeks and be consecutively employed throughout that time period.

If you run your own business, the time test extends to 78 weeks at your new place of self-employment within the first 24 months after your move. You must start your self-employment also within 12 months of your move date to meet the time test.

Deducting moving expenses

To receive your tax break, keep detailed receipts of your IRS-approved deductions, including but not limited to the amount you spend to move (either with a professional mover or a self-service move), storage costs, insurance fees, utility connections and disconnections, auto transport costs and certain travel and lodging expenses associated with your move. You will need to complete IRS Form 3903 along with your personal tax return. The total deductible moving expenses will be shown as a line item on Schedule A, Itemized Deductions. Review IRS Publication 521, Moving Expenses, for a complete list of what you can deduct related to your move.

If you’re married and filing a joint return, only one person needs to fulfill the time and distance tests to qualify. However, you and your spouse cannot combine employment periods to meet test requirements.

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