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Deductible Moving Expenses Defined
Moving expenses include only the reasonable expenses of (1) moving household goods and personal effects to the new residence and (2) traveling to the new place of residence, including the costs of lodging. No deduction is permitted for the cost of meals. Thus, to be deductible, moving expenses must be reasonable and fall within one of the stated categories. They must be incurred for the taxpayer and any member of the taxpayer's household whose principal place of abode is both the taxpayer's former and new residence. Moving expenses are reasonable if they are reasonable under the circumstances of the particular move. Generally, expenses for moving household goods and personal effects or for travel in connection with the move are reasonable only to the extent that the move or travel is by the shortest and most direct route available from the former residence to the new residence, is by a conventional mode of transportation, and takes the shortest period of time commonly required to travel the distance involved. Thus, if the taxpayer's moving or travel arrangements include an extended route for sightseeing, stopovers, or other similar reasons, the resulting additional expenses are not reasonable and not related to the commencement of work at the new principal place of employment and, therefore, are not deductible.
(a) HOUSEHOLD GOODS AND PERSONAL EFFECTS
Expenses of moving household goods and personal effects include the cost of transporting the goods and personal effects from the taxpayer's former residence to her new residence, as well as the costs of packing, crating, storing in transit, and insuring.
(b) TRAVEL TO THE NEW RESIDENCE
Expenses of traveling from the former residence to the new place of residence include the costs of transportation and lodging while en route (including the date of arrival) from the taxpayer's former residence to his new place of residence. The deduction for travel expenses from the former residence to the new place of residence includes expenses incurred by or on behalf of members of the taxpayer's household. Where a taxpayer uses an automobile to move, the portion of the moving expense deduction relating to the automobile's use is determined by deducting either (1) actual out-of-pocket expenses incurred or (2) ten cents per mile.
CONDITIONS FOR ALLOWANCE
In order to deduct moving expenses, a taxpayer must satisfy both the minimum distance condition and the minimum period of employment condition.
(a) MINIMUM DISTANCE
If the taxpayer has a former principal place of work, the distance between the former residence and the new principal place of work must be at least 50 miles farther than the distance between the taxpayer's former residence and his former principal place of work. Where the taxpayer does not have a former principal place of work, the distance between the former residence and the new principal place of work must be at least 50 miles.
(b) MINIMUM PERIOD OF EMPLOYMENT
In order for an employee's moving expenses to be deductible, she must be a full-time employee either for at least 39 weeks in the twelve-month period immediately after arriving at her new principal place of work or for at least 78 weeks during the 24-month period immediately after arriving at her new principal place of work. To meet the minimum period of employment, the taxpayer need not remain in the same job or same trade or business for the required number of weeks as long as he is employed in the same general location for the required period. Special rules apply to moving expenses paid or incurred by members of the armed forces of the United States on active duty who move pursuant to a military order and incident to a permanent change of station. If the moving expenses are not paid or incurred incident to a permanent change of station, however, a member of the armed forces is subject to the regular provisions. Members of the armed forces are exempt from the minimum distance and minimum period of employment conditions of when they make a move incident to a permanent change of station. In addition, members of the armed forces are not required to include in their gross income the value of any moving or storage services furnished by the United States government to them, their spouses, or their dependents in connection with a permanent change of station. Reimbursements or allowances for moving expenses are also not included in income, as long as the reimbursements or allowances do not exceed the actual expenses paid or incurred. The excess is includible in income as wages. If the actual expenses of moving exceed the reimbursement or allowance, a deduction is allowed for the excess.
The term "permanent change of station" includes:
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a move from home to the first post of duty when appointed, reappointed, reinstated, called to active duty, enlisted, or inducted;
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a move from the last post of duty to home or a nearer point in the United States in connection with retirement, discharge, resignation, separation under honorable conditions, transfer, relief from active duty, or temporary disability, if the move occurs within one year of termination of active duty; and
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a move from one permanent post of duty to another permanent post of duty at a different duty station, even if the member separates from the armed forces immediately or shortly after the move.
RETIREES OR SURVIVORS OF DECEDENTS WHO WORKED ABROAD
Retirees returning to the United States and spouses and dependents of decedents who worked outside the United States may deduct the cost of moving back to the United States without meeting the employment requirements. Under this rule, qualified retiree moving expenses and qualified survivor moving expenses are treated as though the moving taxpayer began employment at a new principal place of work located within the United States.
RULES FOR FOREIGN MOVES
Special rules apply to foreign moves. The household goods and personal effects category of moving expenses is broadened to include the cost of moving household goods and personal effects to and from storage and of storing household goods and personal effects while the taxpayer continues working at his new place of employment. Consult your tax advisor if you are moving to a foreign country.
MOVING TO SOUTH CAROLINA FROM ABROAD
If you have income from sources within the United States, you may have to file a U.S. income tax return even if you are only visiting this country. This publication summarizes the requirements of U.S. income tax law. Some of the tax laws that apply to nonresident aliens are different from those that apply to U.S. resident aliens. You are a nonresident alien if you are not a U.S. citizen and you do not meet either the substantial presence test or the "green card" (Alien Registration Card) test. Under U.S. tax law, you may be a resident alien if you are in the United States for at least 31 days during the calendar year, and your stay during the current year and the preceding 2 years is long enough to meet the substantial presence test. For details on this test and the "green card" test, get Publication 519, U.S. TAX GUIDE FOR ALIENS.
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