Have any of your clients pulled up stakes in the past year? If certain requirements are met, those individuals may deduct their job-related moving expenses “above the line” on their 2017 tax returns.
But this tax break is fleeting: Under the Tax Cuts and Jobs Act (TCJA), moving expenses are no longer deductible, except for active-duty military personnel, beginning in 2018.
Note that you can’t deduct any moving expenses if the reason for the move is personal. There’s no tax write-off for simply moving on up and out.
To qualify for the deduction for job-related moving expenses on a 2017 tax return, a taxpayer must pass a two-part test involving distance and time.
- Distance test: Your new job location must be at least 50 miles farther from your old home than your old job location was from your former home. The IRS uses the shortest of the most commonly traveled routes to measure the distance between the two points.
- Time test: If you’re an employee, you must work full-time for at least 39 weeks during the first 12 months after you arrive in the general area of the new job. But you don’t have to work for the same employer as long as the 39-week test is satisfied.
The time test is even stiffer if you’re self-employed. In this case, you must work full-time for (1) at least 39 weeks during the first 12 months and (2) a total of at least 78 weeks during the first 24 months after you arrive in the general area.
About Ken Berry
Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a wide variety of newsletters, magazines, and other periodicals.