J. William Seabrooke CPA P.C.

The exclusive purpose for the information which is provided from this website is to disseminate  information, and not to provide tax advice.

From a global perspective, we are a a very mobile society.  With the exception of those who are serving in our U.S. Armed Forces, up until the mid 1900s moving our families from the general area in which we grew up to another location 100 miles or so away was not a usual occurrence.  During the latter half of that century we began to relocate from one geographic area to another for a myriad of reasons including, employment, better career opportunities, financial gain, adventure, retirement etc.  However, there are expenses and costs which are associated with any move.  In some cases an employer may cover 100% of the costs.  In other situations taxpayers are required to pay some or all of these costs. 

If you meet the specific requirements, most of your costs may be deducted on your tax return. Your total deductible moving expenses are an adjustment (reduction) of your “Total Income” for the determination of your “Adjusted Gross Income” (Line #26 of the 2010 Federal form 1040).  There are two key references for these expenses:  1)  IRS Publication 521, “Moving Expenses”, (http://www.irs.gov/pub/irs-pdf/p521.pdf)  and the instructions for the required Federal form 3903, “Moving Expenses” (http://www.irs.gov/pub/irs-pdf/f3903.pdf)   The former document is only 19 pages in length and the latter is a four-page document.   If your situation or circumstances are not explained, call (800) 829-1040.  You should also review the instructions for your state of residence if the state in which you reside has a state income tax as the rules and requirements may be different.

There are some additional specific facts and information that should be emphasized:

1. If you are buying or selling a home in conjunction with your move, review the provisions and requirements that are contained in IRS Publication 523 (“Selling Your Home” http://www.irs.gov/pub/irs-pdf/p523.pdf) and this recent website article:  http://www.billseabrookecpa.com/blog/?p=1199
2.  Keep accurate, detailed written records for your move including receipts, bills, statements, cancelled checks, credit card statements, mileage logs, employer reimbursement claim forms, etc;
3. Be sure to keep a complete (all pages), signed copy of the Housing and Urban Development form (HUD-1) from both the purchase and sale of your old home, and the the purchase of your new home; 
4. Effective July 1, 2011 the standard mileage rate for moving has increased from $ .195/mile, as stated in the IRS Form 3903 instructions, to $ .235/mile;
5. The costs for sightseeing trips or personal excursions enroute are not deductible;
6. The expenses for your move must be “reasonable”;
7. Your employer will report the total amount of your moving expense reimbursements in Block #12 of your W-2 form using code “P”  Be sure that you reduce the amounts deducted on your tax return by this amount;
8. The costs of meals and house hunting trips are no longer deductible;
9. You can not deduct your moving costs as both a “business expense” and a “moving expense”;
10. Generally, your moving expenses must be work related.  If you are an “employee” you are expected to work full-time for 39 weeks (three quarters) during the 12 months following your move.  If you are “self-employed” the requirement is 78 weeks (six quarters) during the 24-month period after your move.  Review pages two-six of IRS Publication 521;
11. There are also specific tests for the distance which you moved.  Special rules are provided for members of the U.S. Armed Forces, those who are moving to or from the United States, and other specific situations (i.e. retirees and survivors). 

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