One benefit that can help take the sting out of the cost of moving is that the Internal Revenue Service allows the deduction of certain expenses from your taxes as long as you meet its criteria.
What are deductible moving expenses?
Because the IRS has a short list of allowable deductions, it won’t be too difficult to keep track. Here’s an outline of what you can expect to take off your taxes:
- The cost of packing and transporting your household goods and personal effects, whether you do it yourself or hire professional movers, is fully deductible. This also includes the cost of insuring your belongings during the move.
- Any costs to connect and disconnect utilities because of the move.
- The cost of transporting your cars and pets to a new home.
- You can also deduct for personal belongings that are not stored at your old residence. The cost, however, can not be more than if you had moved those items from your residence. For example, if you have belongings stored with a family member or in storage in another city where you had lived previously, you can deduct the expenses of moving those items to your new residence. If, say, the distance from the stored belongings to your new location is greater, it is likely more expensive to move them. You can still take a deduction for moving those items, but only as much as if you had them with you at your old home and were moving them to your new location.
- The cost of storing your belongings for no more than 30 consecutive days after the move is also a deductible expense.
- You can deduct lodging expenses for one day at your old residence after your belongings have been moved.
- Only deductions for one trip for you and your household members are allowed. This means. For example, you cannot deduct the cost of multiple trips to house hunt. You and your household members do not have to travel the same way or at the same time.
- If you are traveling by car, you can deduct your actual expenses for gasoline, oil, lodging, parking fees and tolls. Instead of itemizing, you can choose to deduct 18 cents per mile (up from 16 cents on 2006 tax returns). You cannot deduct expenses for meals, sightseeing or repairs, maintenance, insurance or depreciation on your car.
For more information and detailed explanations of moving deductions, visit the IRS Web site at http://www.irs.gov/publications/p521/index.html