I was advised prior to our move that the expenses incurred in relocation are deductible from our taxes - does anyone know if this is correct and if so - is it 100% or just a portion?
I'm getting my receipts in order for the upcoming quarterly SE tax payment and would LOVE to be able to deduct some of what we spent on gas, hotels, etc. moving up here...
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I just checked the IRS site and it all seems to be relative to starting a new job and the distance of the new home from the new job, etc.- which certainly doesn't apply to us. We *did* file for a new LLP designation in the new State though - I wonder if that 'counts'??
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Oh! I didn't read far enough down the page....goodness...
Time Test for Self-Employed Persons
If you are self-employed, you must work full-time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you arrive in the general area of your new job location. This is called the 78-week test. These three rules apply:
Count any full-time work you do either as an employee or as a self-employed person.
You do not have to work for the same employer or be self-employed in the same trade or business for the 78 weeks.
You must work within the same general commuting area for all 78 weeks.
Huh?? So I'm reading into this that if we plan to live here for at least the next 78 weeks and are working 'full time' we can claim our moving expenses....
And from the IRS pub 521: Moves to Locations in the United States
If you meet the requirements under Who Can Deduct Moving Expenses, earlier, you can deduct expenses for a move to the area of a new main job location within the United States or its possessions. Your move may be from one U.S. location to another or from a foreign country to the United States. Household goods and personal effects. You can deduct the cost of packing, crating, and transporting your household goods and personal effects and those of the members of your household from your former home to your new home. For purposes of moving expenses, the term “personal effects” includes, but is not limited to, movable personal property that the taxpayer owns and frequently uses. If you use your own car to move your things, see Travel by car, earlier. You can deduct any costs of connecting or disconnecting utilities required because you are moving your household goods, appliances, or personal effects. You can deduct the cost of shipping your car and your household pets to your new home. You can deduct the cost of moving your household goods and personal effects from a place other than your former home. Your deduction is limited to the amount it would have cost to move them from your former home.
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Yes, Tess, you're right. If you stay where you are for at least 78 weeks you can claim the moving expenses for that move. However, you will claim the moving expenses on your personal income tax return to reduce your personal income tax, it will not reduce your self employment taxes.
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Are moving expenses tax deductible?
Re: Are moving expenses tax deductible?
I would check the IRS website if I recall, there are 2 key points one being over a certain distance.
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