Tax Information You Should Know Before Relocating
For those who had moved to new locations, they can easily agree that moving comes with some challenges depending on the moving person’s preparedness. Many Cities in USA, especially Los Angeles, experience a good number of people moving in and out monthly for different peculiar reasons. While some people fret at the though of moving from their present location, it is sometimes inevitable for one to move to an entirely different place.
This may be due to job change, or job relocation, new property or mortgage acquisition and so on. There are popular considerations when people are moving to new locations and this includes but not limited to utilities and cables but the issue of taxation is grossly misrepresented or entirely missing in most moving cases. May be due to lack of knowledge of the tax deductions that should accrue to you or just mere nonchalance.
That you are going to expend money on your actual moving is a must but what so many people don’t know is that there three things they ought to do to qualify for some tax deductions in their next tax returns after moving. Consider the amount you will be spending on the moving services, the trucking, the gas, the hospital bills, the packing boxes etc.
One of the requirements of qualifying for moving tax deduction is that you have to start work in your new location. This is generally mistaken to mean that one should already have job in the new location before moving. What it actually means is that you should be able to find work and start immediately you get to your new location.
The second requirement for one to qualify for moving tax deduction is that you should be able to get job within a specified period of time to enjoy this unique tax deduction. The time frame during you must have gotten job in your new location is usually one year. You inability to get job and report it according to the tax authorities for deduction procession within one year may be taken that you went back to your new job or relocated back to your former base.
The third requirement by the Internal Revenue Service is called closely related in place test. This is a simple distance test you should undergo before you get some tax reprieve due to your relocation. It is require that your new work location should be at least 50 miles from your old job before you can enjoy this tax reprieve. This is quite easy to claim and many people actually qualify for it but don’t go for it because of mere ignorance.
You have to get form 3903 and attach it to your 1040 and file for the necessary moving tax deduction evaluations inform of travel expenses and all moving expenses in some cases. You may also enjoy tax deduction amounting to an average of 30 days moving storage if you qualify. Note that you will not be able to get tax deductions on the food you eat while relocating or the hotel bills you incur in transit.