How to Calculate a Moving Expense Deduction

by Mark Kennan

The moving expenses deduction allows you to write off qualifying moving costs without itemizing your income tax deductions. However, only work-related moves qualify. Your new place of work must be at least 50 miles farther from your home than your previous place of work. Once you arrive, you must work 39 weeks of the first year if you are an employee, and also 78 weeks of the first two years if you are self-employed. Knowing which costs qualify for the moving expenses deduction lets you know which receipts to keep ahead of time.

1. Add up all the qualifying costs you paid to transport and store your household goods and personal items during the move. You can include the cost of storing the goods for up to 30 consecutive days before they arrive in your new home. For example, if you pay professional movers $3,200 and pay a storage fee of $200, your total costs of moving your belongings would be $3,400.

2. Add up all the qualifying costs of your personal travel from your old home to your new home. If your trip took multiple days, you can include the cost of lodging during that time, however, meals are never included. In addition, you can only deduct the cost of the most direct route. For example, if you move from Chicago to Boston but you take a detour into Canada to sight see on the way, you can only include the costs of the most direct route. You can include mileage driven at the annual rate, which equals 16.5 cent per mile, or the total cost of driving.

3. Add the cost of moving your belongings to the cost of moving yourself to find the total costs. For example, if it cost $3,400 to move your belongings and $2,000 to move yourself, your total qualifying costs would be $5,400.

4. Subtract any employer reimbursement from your qualified costs to find your moving expenses deduction. In this example, if your employer chipped in $2,500 to help cover your costs, subtract $2,500 from $5,400 to find you can deduct $2,900 on your taxes for your moving expenses.


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