Relocating for a new job? In addition to sorting out all those things you stuffed in the back of your cupboards, wrapping up the crystal, and figuring out what to do with that yellow naugahyde couch that you should have tossed the last time you moved, attempting to sort out the tax implications of your moving expenses is not the least of your worries. For one, you need to figure out how to separate your personal expenditures from deductible moving expenses, and, if your employer is reimbursing all or a portion of your moving expenses, you need to figure out how much of the reimbursement is taxable. While we canít be there with markers and cardboard boxes, we can help you with some of the rules relating to work-related relocations.
Generally, the IRS defines moving expenses as deductible only if they are closely related both in time and place to when you started work at the new location.
Closely related in time generally means that all moving expenses you report must be incurred within one year after the first day you report to your new job. If you can prove that a move wasnít possible within the one-year timeframe, the IRS may grant you an exception.