Have you recently moved to New England for a new job? Individuals that decide to relocate may have income or expenses that could affect the filing of their 1040 tax return. If you have moved during the year or plan on moving in the near future there are a few items you should note.
First and foremost, be sure to change your address with the Internal Revenue Service (IRS) and US postal service to ensure that you will receive notices and other correspondence from the IRS. This includes tax refunds if you have not decided to receive direct deposit. Fill out Form 8822 Change of Address and mail it to the IRS.
To determine if your expenses are tax deductible, your move must be related to the start of a new job or relocation of an existing one and you must pass the time and distance test. For the distance test, to keep it simple, your new job must be located at least 50 miles from your former residence. To pass the time test, employees must work full-time for 39 weeks during the first 12 months after arriving to the new location. Self-employed individuals must meet the same amount and have a total of 78 weeks in the first 24 months following your move. Members of the military are exempt from the time and distance tests if their move was a military order.
Expenses that are deductible include travel and lodging in relation to your move for yourself and members of your household. Expenses can include airfare, mileage, parking, tolls, and hotels. Expenses may also include the cost of packing, transporting, insuring, and storing your personal belongings as well as setting up new utilities and disconnecting old ones. If your former or new employer reimburses you for all or part of your move, you may have to report this as income on your tax return.
If you have recently moved or have the opportunity to relocate please contact me to discuss the tax implications related to this move.