Standard
mileage rate. The standard
mileage rate for moving expenses
has been increased from 12 cents
a mile in 2003 to 14 cents a
mile in 2004. See
Travel by car under
Deductible Moving Expenses.
Reminder
Change of
address. If you change your
mailing address, be sure to
notify the IRS using Form 8822,
Change of Address. Mail it to
the Internal Revenue Service
Center for your old address.
Addresses for the Service
Centers are on the back of the
form.
Introduction
This chapter explains the
deduction of certain expenses of
moving to a new home because you
changed job locations or started
a new job. It includes the
following topics.
Who can deduct
moving expenses.
What moving expenses
are deductible.
What moving expenses
are not deductible.
How a reimbursement
affects your moving
expense deduction.
How and when to
report moving expenses.
Special rules for
members of the Armed
Forces.
You may be able to deduct
moving expenses whether you are
self-employed or an employee.
Your expenses generally must be
related to starting work at your
new job location. However,
certain retirees and survivors
may qualify to claim the
deduction even though they are
not starting work at a new job
location. See
Who
Can Deduct Moving Expenses.
Moves to
locations outside the United
States.
This chapter does not
discuss moves outside the
United States. If you are a
United States citizen or
resident alien who moved
outside the United States or
its possessions because of
your job or business, see
Publication 521, Moving
Expenses, for special rules
that apply to your move.
Useful Items - You
may want to see:
Publication
521
Moving Expenses
Form
(and Instructions)
3903
Moving Expenses
8822
Change of Address
Who Can Deduct
Moving Expenses
You can deduct your moving
expenses if you meet all three
of the following requirements.
Your move is closely
related to the start of
work.
You meet the
distance test.
You meet the time
test.
After you have read these
rules, you may want to use
Figure 19-B to help
you decide if you can deduct
your moving expenses.
Different rules may apply if
you are a member of the Armed
Forces or a retiree or survivor
moving to the United States.
These rules are discussed later
in this chapter.
Related to
Start of Work
Your move must be closely
related, both in time and in
place, to the start of work
at your new job location.
Closely
related in time.
You can generally
consider moving expenses
incurred within 1 year
from the date you first
reported to work at the
new location as closely
related in time to the
start of work. It is not
necessary that you
arrange to work before
moving to a new
location, as long as you
actually do go to work.
If you do not move
within 1 year of the
date you begin work, you
ordinarily cannot deduct
the expenses unless you
can show that
circumstances existed
that prevented the move
within that time.
Example.
Your family moved
more than a year
after you started
work at a new
location. You
delayed the move for
18 months to allow
your child to
complete high
school. You can
deduct your moving
expenses.
Closely
related in place.
You can generally
consider your move
closely related in place
to the start of work if
the distance from your
new home to the new job
location is not more
than the distance from
your former home to the
new job location. If
your move does not meet
this requirement, you
may still be able to
deduct moving expenses
if you can show that:
You are
required to live
at your new home
as a condition
of your
employment, or
You will
spend less time
or money
commuting from
your new home to
your new job
location.
Home
defined. Your home
means your main home
(residence). It can be a
house, apartment,
condominium, houseboat,
house trailer, or
similar dwelling. It
does not include other
homes owned or kept up
by you or members of
your family. It also
does not include a
seasonal home, such as a
summer beach cottage.
Your former home means
your home before you
left for your new job
location. Your new home
means your home within
the area of your new job
location.
Retirees or survivors.
You may be able to
deduct the expenses of
moving to the United
States or its
possessions even though
the move is not related
to the start of work at
a new job location. You
must have worked outside
the United States or be
a survivor of someone
who did. See
Retirees or
Survivors Who Move to
the United States, later.
Distance
Test
Your move will meet the
distance test if your new
main job location is at
least 50 miles farther from
your former home than your
old main job location was
from your former home. For
example, if your old main
job location was 3 miles
from your former home, your
new main job location must
be at least 53 miles from
that former home. You can
use Worksheet 19-1
to see if you meet this
test.
The distance between a
job location and your home
is the shortest of the more
commonly traveled routes
between them. The distance
test considers only the
location of your former
home. It does not take into
account the location of your
new home. See
Figure 19-A.
Worksheet 19-1.
Distance Test
Keep for your
Records
Note.
Members of
the armed
forces may
not have to
meet this
test. See
Members
of the Armed
Forces.
1.
Enter the
number of
miles from
your old
home to your
new
workplace
1.
miles
2.
Enter the
number of
miles from
your old
home to your
old
workplace
2.
miles
3.
Subtract
line 2 from
line 1. If
zero of
less, enter
-0-
3.
miles
4.
Is line 3 at
least 50
miles?
□ Yes. You
meet this
test.
□ No. You do
not meet
this test.
You cannot
deduct your
moving
expenses.
Example.
You moved to a new
home less than 50 miles
from your former home
because you changed main
job locations. Your old
main job location was 3
miles from your former
home. Your new main job
location is 60 miles
from that home. Because
your new main job
location is 57 miles
farther from your former
home than the distance
from your former home to
your old main job
location, you meet the
distance test.
First
job or return to
full-time work. If
you go to work full time
for the first time, your
place of work must be at
least 50 miles from your
former home to meet the
distance test.
If you go back to
full-time work after a
substantial period of
part-time work or
unemployment, your place
of work must also be at
least 50 miles from your
former home.
Armed
Forces. If you are
in the Armed Forces and
you moved because of a
permanent change of
station, you do not have
to meet the distance
test. See
Members of the Armed
Forces,
later.
Main
job location. Your
main job location is
usually the place where
you spend most of your
working time. If there
is no one place where
you spend most of your
working time, your main
job location is the
place where your work is
centered, such as where
you report for work or
are otherwise required
to “base”
your work.
Union members.
If you work for
several employers on a
short-term basis and you
get work under a union
hall system (such as a
construction or building
trades worker), your
main job location is the
union hall.
More than one job.
If you have more than
one job at any time,
your main job location
depends on the facts in
each case. The more
important factors to be
considered are:
The total
time you spend
at each place,
The amount
of work you do
at each place,
and
How much
money you earn
at each place.
Time Test
To deduct your moving
expenses, you also must meet
one of the following two
time tests.
The time test
for employees.
The time test
for self-employed
persons.
Both of these tests are
explained below. See
Table 19-1 for a
summary of these tests.
If you are an
employee, you must work
full time for at least
39 weeks during the
first 12 months (39-week
test) after you arrive
in the general area of
your new job location.
Full-time employment
depends on what is usual
for your type of work in
your area.
For purposes of this
test, the following four
rules apply.
You count
only your
full-time work
as an employee,
not any work you
do as a
self-employed
person.
You do not
have to work for
the same
employer for all
39 weeks.
You do not
have to work 39
weeks in a row.
You must
work full time
within the same
general
commuting area
for all 39
weeks.
Temporary absence
from work. You
are considered to
have worked full
time during any week
you are temporarily
absent from work
because of illness,
strikes, lockouts,
layoffs, natural
disasters, or
similar causes. You
are also considered
to have worked full
time during any week
you are absent from
work for leave or
vacation provided
for in your work
contract or
agreement.
Seasonal work.
If your work is
seasonal, you are
considered to be
working full time
during the
off-season only if
your work contract
or agreement covers
an off-season period
of less than 6
months. For example,
a school teacher on
a 12-month contract
who teaches on a
full-time basis for
more than 6 months
is considered to
have worked full
time for the entire
12 months.
Time Test
for
Self-Employed
Persons
If you are
self-employed, you must
work full time for at
least 39 weeks during
the first 12 months and
for a total of at least
78 weeks during the
first 24 months (78-week
test) after you arrive
in the general area of
your new job location.
For purposes of the
time test for
self-employed persons,
the following three
rules apply.
You count
any full-time
work you do
either as an
employee or as a
self-employed
person.
You do not
have to work for
the same
employer or be
self-employed in
the same trade
or business for
the 78 weeks.
You must
work within the
same general
commuting area
for all 78
weeks.
Table 19–1.
Satisfying the
Time Test for
Employees and
Self-Employed
Persons
IF
you
are...
THEN
you
satisfy
the time
test by
meeting
the...
an
employee
39-week
test for
employees.
both
self-employed
and an
employee,
but
unable
to
satisfy
the
39-week
test for
employees
78-week
test for
self-employed
persons.
both
self-employed
and an
employee
at the
same
time
78-week
test for
a
self-employed
person
or the
39-week
test for
an
employee.
Your
principal
place of
work
determines
which
test
applies.
self-employed
78-week
test for
self-employed
persons.
Table
19–1.
Satisfying
the Time
Test for
Employees
and
Self-Employed
Persons
IF
you
are...
THEN
you
satisfy
the
time
test
by
meeting
the...
an
employee
39-week
test
for
employees.
both
self-employed
and
an
employee,
but
unable
to
satisfy
the
39-week
test
for
employees
78-week
test
for
self-employed
persons.
both
self-employed
and
an
employee
at
the
same
time
78-week
test
for
a
self-employed
person
or
the
39-week
test
for
an
employee.
Your
principal
place
of
work
determines
which
test
applies.
self-employed
78-week
test
for
self-employed
persons.
Self-employment.
You are
self-employed if you
work as the sole
owner of an
unincorporated
business or as a
partner in a
partnership carrying
on a business. You
are not considered
self-employed if you
are semiretired, are
a part-time student,
or work only a few
hours each week.
Full-time work.
You can count only
those weeks during
which you work full
time as a week of
work. Whether you
work full time
during any week
depends on what is
usual for your type
of work in your
area.
If you were both an
employee and
self-employed, see
Table 19-1
for the requirements.
Joint Return
If you are married
and file a joint return
and both you and your
spouse work full time,
either of you can
satisfy the full-time
work test. However, you
cannot add the weeks
your spouse worked to
the weeks you worked to
satisfy that test.
Time test not yet
met. You can
deduct your moving
expenses on your
2004 tax return even
though you have not
yet met the time
test by the date
your 2004 return is
due. You can do this
if you expect to
meet the 39-week
test in 2005, or the
78-week test in 2005
or 2006. If you
deduct moving
expenses but do not
meet the time test
in 2005, or 2006,
you must either:
Report
your moving
expense
deduction as
other income
on your Form
1040 for the
year you
cannot meet
the test, or
Amend
your 2004
return.
If you do not deduct
your moving expenses on
your 2004 return and you
later meet the time
test, you can file an
amended return for 2004
to take the deduction.
You do not have to
meet the time test if
one of the following
applies.
You are in
the Armed Forces
and you moved
because of a
permanent change
of station. See
Members of
the Armed
Forces, later.
Your main
job location was
outside the
United States
and you moved to
the United
States because
you retired. See
Retirees or
Survivors Who
Move to the
United States,
later.
You are the
survivor of a
person whose
main job
location at the
time of death
was outside the
United States.
See
Retirees or
Survivors Who
Move to the
United States,
later.
Your job at
the new location
ends because of
death or
disability.
You are
transferred for
your employer's
benefit or laid
off for a reason
other than
willful
misconduct. For
this exception,
you must have
obtained
full-time
employment and
you must have
expected to meet
the test at the
time you started
the job.
Members of
the Armed
Forces
If you are a member
of the Armed Forces on
active duty and you move
because of a permanent
change of station, you
do not have to meet the
distance and time tests,
discussed earlier. You
can deduct your
unreimbursed moving
expenses.
A permanent change of
station includes:
A move from
your home to
your first post
of active duty,
A move from
one permanent
post of duty to
another, and
A move from
your last post
of duty to your
home or to a
nearer point in
the United
States. The move
must occur
within 1 year of
ending your
active duty or
within the
period allowed
under the Joint
Travel
Regulations.
Spouse and
dependents.
If a member of the
Armed Forces dies,
is imprisoned, or
deserts, a permanent
change of station
for the spouse or
dependent includes a
move to:
The
place of
enlistment,
The
member's,
spouse's, or
dependent's
home of
record, or
A nearer
point in the
United
States.
If the military
moves you and your
spouse and
dependents to or
from separate
locations, the moves
are treated as a
single move to your
new main job
location.
More information.
For more
information on
moving expenses for
members of the Armed
Forces, and
instructions for
completing Form
3903, see
Members of the
Armed Forces in
Publication 521.
Retirees or
Survivors
Who Move to
the United
States
If you are a retiree
who was working abroad
or a survivor of a
decedent who was working
abroad and you move to
the United States or one
of its possessions, you
do not have to meet the
time test, discussed
earlier. However, you
must meet the
requirements discussed
below under
Retirees who were
working abroad
or
Survivors of
decedents who were
working abroad.
If you are living
in the United States,
retire, and then move
and remain retired, you
cannot claim a moving
expense deduction for
that move.
United States
defined. For
this section of this
chapter, the term “United
States”
includes the
possessions of the
United States.
Retirees who were
working abroad.
You can deduct
moving expenses for
a move to a new home
in the United States
when you permanently
retire. However,
both your former
main job location
and your former home
must have been
outside the United
States.
Permanently
retired.
You are considered
permanently retired
when you cease
gainful full-time
employment or
self-employment. If,
at the time you
retire, you intend
your retirement to
be permanent, you
will be considered
retired though you
later return to
work. Your intention
to retire
permanently may be
determined by:
Your age
and health,
The
customary
retirement
age for
people who
do similar
work,
Whether
you receive
retirement
payments
from a
pension or
retirement
fund, and
The
length of
time before
you return
to full-time
work.
Survivors of
decedents who were
working abroad.
If you are the
spouse or the
dependent of a
person whose main
job location at the
time of death was
outside the United
States, you can
deduct moving
expenses if the
following five
requirements are
met.
The move
is to a home
in the
United
States.
The move
begins
within 6
months after
the
decedent's
death. (When
a move
begins is
described
later.)
The move
is from the
decedent's
former home.
The
decedent's
former home
was outside
the United
States.
The
decedent's
former home
was also
your home.
When a move
begins.
A move begins when
one of the following
events occurs.
You
contract for
your
household
goods and
personal
effects to
be moved to
your home in
the United
States, but
only if the
move is
completed
within a
reasonable
time.
Your
household
goods and
personal
effects are
packed and
on the way
to your home
in the
United
States.
You
leave your
former home
to travel to
your new
home in the
United
States.
Deductible Moving
Expenses
If you meet the requirements
discussed earlier under
Who
Can Deduct Moving Expenses,
you can deduct the reasonable
expenses of:
Moving your
household goods and
personal effects
(including in-transit or
foreign-move storage
expenses), and
Traveling (including
lodging but not meals)
to your new home.
You cannot deduct any
expenses for meals.
Reasonable
expenses. You can
deduct only those expenses
that are reasonable for the
circumstances of your move.
For example, the cost of
traveling from your former
home to your new one should
be by the shortest, most
direct route available by
conventional transportation.
If, during your trip to your
new home, you stop over, or
make side trips for
sightseeing, the additional
expenses for your stopover
or side trips are not
deductible as moving
expenses.
Travel by
car. If you use your
car to take yourself,
members of your household,
or your personal effects to
your new home, you can
figure your expenses by
deducting either:
Your actual
expenses, such as
gas and oil for your
car, if you keep an
accurate record of
each expense, or
The standard
mileage rate of 14
cents a mile.
Whether you use actual
expenses or the standard
mileage rate to figure your
expenses, you can deduct
parking fees and tolls you
paid in moving. You cannot
deduct any part of general
repairs, general
maintenance, insurance, or
depreciation for your car.
Member of
household. You can
deduct moving expenses you
pay for yourself and members
of your household. A member
of your household is anyone
who has both your former and
new home as his or her home.
It does not include a tenant
or employee, unless that
person is your dependent.
Location of
move. There are
different rules for moving
within or to the United
States than for moving
outside the United States.
This chapter only discusses
moves within or to the
United States. The rules for
moves outside the United
States can be found in
Publication 521.
Household
Goods and
Personal Effects
You can deduct the cost
of packing, crating, and
transporting your household
goods and personal effects
and those of the members of
your household from your
former home to your new
home.
If you use your own car
to move your things, see
Travel by car,
earlier.
You can deduct any costs
of connecting or
disconnecting utilities
required because you are
moving your household goods,
appliances, or personal
effects.
You can deduct the cost
of shipping your car and
household pets to your new
home.
You can deduct the cost
of moving your household
goods and personal effects
from a place other than your
former home. Your deduction
is limited to the amount it
would have cost to move them
from your former home.
You cannot deduct the
cost of moving furniture you
buy on the way to your new
home.
Storage
expenses. You can
include the cost of
storing and insuring
household goods and
personal effects within
any period of 30
consecutive days after
the day your things are
moved from your former
home and before they are
delivered to your new
home.
Travel
Expenses
You can deduct the cost
of transportation and
lodging for yourself and
members of your household
while traveling from your
former home to your new
home. This includes expenses
for the day you arrive.
You can include any
lodging expenses you had in
the area of your former home
within one day after you
could no longer live in your
former home because your
furniture had been moved.
You can deduct expenses
for only one trip to your
new home for yourself and
members of your household.
However, all of you do not
have to travel together or
at the same time. If you use
your own car, see
Travel by car,
earlier.
Nondeductible
Expenses
You cannot deduct the
following items as moving
expenses.
Any part of the
purchase price of your
new home.
Car tags.
Driver's license.
Expenses of buying
or selling a home.
Expenses of getting
or breaking a lease.
Home improvements to
help sell your home.
Loss on the sale of
your home.
Losses from
disposing of memberships
in clubs.
Meal expenses.
Mortgage penalties.
Pre-move
househunting expenses.
Real estate taxes.
Refitting of carpets
and draperies.
Security deposits
(including any given up
due to the move).
Storage charges
except those incurred in
transit and for foreign
moves.
Temporary living
expenses.
No double
deduction.
You cannot take a moving
expense deduction and a
business expense deduction
for the same expenses. You
must decide if your expenses
are deductible as moving
expenses or as business
expenses. For example,
expenses you have for
travel, meals, and lodging
while temporarily working at
a place away from your
regular place of work may be
deductible as business
expenses if you are
considered away from home on
business. Generally, your
work at a single location is
considered temporary if it
is realistically expected to
last (and does in fact last)
for 1 year or less. See
Temporary Assignment or Job
in chapter 28
for information on deducting
your expenses.
How and When To
Report
This section explains how and
when to report your moving
expenses and any reimbursements
or allowances you received for
your move.
Form 3903.
Use Form 3903 to figure
your moving expense
deduction.
Where to
deduct.
Deduct your moving
expenses on line 29 of Form
1040. The amount of moving
expenses you can deduct is
shown on line 5 of Form
3903.
You cannot deduct
moving expenses on Form
1040EZ or Form 1040A.
Reimbursements.
If you receive a
reimbursement for your
moving expenses, how you
report this amount and your
expenses depends on whether
the reimbursement is paid to
you under an accountable
plan or a nonaccountable
plan.
For more information on
reimbursements, see
Publication 521.
When To
Deduct Expenses
You may have a choice of
when to deduct your moving
expenses and report any
reimbursement.
Expenses not reimbursed.
If you were not
reimbursed, deduct your
allowable moving
expenses either in the
year you incurred them
or in the year you paid
them.
Example.
In December 2003,
your employer
transferred you to
another city in the
United States, where you
still work. You are
single and were not
reimbursed for your
moving expenses. In
2003, you paid for
moving your furniture
and you deducted these
expenses on your 2003
tax return. In January
2004, you paid for
travel to the new city.
You can deduct these
additional expenses on
your 2004 tax return.
Expenses reimbursed.
If you are reimbursed
for your expenses, you
may be able to deduct
your expenses either in
the year you incurred
them or in the year you
paid them. If you use
the cash method of
accounting, you can
choose to deduct the
expenses in the year you
are reimbursed even
though you paid the
expenses in a different
year.
If you are reimbursed
for your expenses in a
year after you paid the
expenses, you may want
to delay taking the
deduction until the year
you receive the
reimbursement. If you do
not choose to delay your
deduction until the year
you are reimbursed and
you deduct moving
expenses that will be
reimbursed, you must
include the
reimbursement in your
income.
Choosing when to deduct.
If you use the cash
method of accounting,
which is used by most
individuals, you can
choose to deduct moving
expenses in the year
your employer reimburses
you if:
You paid the
expenses in a
year before the
year of
reimbursement,
or
You paid the
expenses in the
year immediately
after the year
of reimbursement
but by the due
date, including
extensions, for
filing your
return for the
reimbursement
year.
How
to make the choice.
You choose to deduct
moving expenses in the
year you received
reimbursement by taking
the deduction on your
return, or amended
return, for that year.
You cannot deduct
any moving expenses for
which you received a
reimbursement that was
not included in your
income. (Reimbursements
are discussed in
Publication 521.)
