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If you're moving to Texas, or even within the state, for a new job, some of your moving expenses could be tax deductible under certain circumstances. Here's an easy-to-read overview, which is not intended to be tax advice, and there may be more current information on the subject at irs.gov. Consult your tax professional in order to make sure the deductions apply to your situation.
For moving expenses to be tax deductible, the move has to pass two tests:
The Distance Test
Your new job must be more than 50 miles farther from your previous residence than your old job. So, for example, if your old job was five miles from your previous home, your new job must be at least 55 miles from your old home. The "distance test" does not apply to members of the Armed Forces who move due to a military order and a permanent change of station.
The Time Test
The move must occur within one year from the date you start your new job, and you have to work full-time for at least 39 weeks out of the first 12 months after you arrive in the new job location. This work does not have to be for the same employer, and the 39 weeks do not have to be consecutive. However, they must all be within the same general commuting area to claim your moving expenses as tax deductible. Persons who are self-employed must satisfy different test criteria.
If you use your car to move yourself, your family members and personal property (including pets) to your new location, those moving expenses are tax deductible, too, as long as the expenses are reasonable. Only one trip is allowed.
Some other moving expenses are tax deductible, too:
- You can deduct the cost of shipping your household goods, pets, personal effects and your car, as well as utility connection or disconnection costs required.
- The cost of reasonable, temporary lodging while traveling is deductible, including one day before the actual move and the day of arrival. The lodging doesn’t need to be in the cheapest motel available, but for tax deduction purposes, stay away from 5-star hotels. The cost of meals is not deductible.
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