Deductible Moving Expenses(p7)

If you meet the requirements discussed earlier under Who Can Deduct Moving Expenses, you can deduct the reasonable expenses of:

• Moving your household goods and personal effects (including in-transit or foreign-move storage expenses), and
• Traveling (including lodging but not meals) to your new home.

You can deduct only those expenses that are reasonable for the circumstances of your move. For example, the cost of traveling from your former home to your new one should be by the shortest, most direct route available by conventional transportation. If during your trip to your new home, you stop over, or make side trips for sightseeing, the additional expenses for your stopover or side trips are not deductible as moving expenses.

Beth's employer transferred her from Boston, Massachusetts, to Buffalo, New York. On her way to Buffalo, Beth drove into Canada to visit the Toronto Zoo. Since Beth's excursion into Canada was away from the usual Boston-Buffalo route, the expenses paid or incurred for the excursion are not deductible. Beth can only deduct what it would have cost to drive directly from Boston to Buffalo. Likewise, Beth cannot deduct any expenses, such as the cost of a hotel room, caused by the delay for sightseeing.

If you use your car to take yourself, members of your household, or your personal effects to your new home, you can figure your expenses by deducting either:

• Your actual expenses, such as the amount you pay for gas and oil for your car, if you keep an accurate record of each expense, or
• The standard mileage rate of 19 cents per mile for miles driven during the period from January 1 to June 30, 2011, and 23.5 cents per mile for miles driven during the period from July 1 to December 31, 2011.

Whether you use actual expenses or the standard mileage rate to figure your expenses, you can deduct the parking fees and tolls you pay to move. You cannot deduct any part of general repairs, general maintenance, insurance, or depreciation for your car.

You can deduct moving expenses you pay for yourself and members of your household. A member of your household is anyone who has both your former and new home as his or her home. It does not include a tenant or employee, unless that person is your dependent.

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.

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.

Paul Brown has been living and working in North Carolina for the last 4 years. Because he has been renting a small apartment, he stored some furniture at his parents' home in Georgia. Paul got a job in Washington, DC. It cost him $900 to move the furniture from his North Carolina apartment to Washington and $3,000 to move the stored furniture from Georgia to Washington. It would have cost $1,800 to ship the stored furniture from North Carolina to Washington. He can deduct only $1,800 of the $3,000 he paid. The amount he can deduct for moving his furniture is $2,700 ($900 + $1,800).

You can include the cost of storing and insuring household goods and personal effects within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home.

You can deduct the cost of transportation and lodging for yourself and members of your household while traveling from your former home to your new home. This includes expenses for the day you arrive.

You can include any lodging expenses you had in the area of your former home within one day after you could no longer live in your former home because your furniture had been moved.

The members of your household do not have to travel together or at the same time. However, you can only deduct expenses for one trip per person. If you use your own car, see Travel by car, earlier.

In February 2011, Josh and Robyn Black moved from Minneapolis to Washington, DC, where Josh was starting a new job. Josh drove the family car to Washington, DC, a trip of 1,100 miles. His expenses were $209.00 for mileage (1,100 miles x 19 cents per mile) plus $40 for tolls and $150 for lodging, for a total of $399.00. One week later, Robyn flew from Minneapolis to Washington, DC. Her only expense was her $400 plane ticket. The Blacks' deduction is $799.00 (Josh's $399.00 + Robyn's $400).

To deduct expenses for a move outside the United States, you must move to the area of a new place of work outside the United States and its possessions. You must meet the requirements under Who Can Deduct Moving Expenses, earlier.

If your move is to a location outside the United States and its possessions, you can deduct the following expenses.

• The cost of moving household goods and personal effects from your former home to your new home.
• The cost of traveling (including lodging) from your former home to your new home.
• The cost of moving household goods and personal effects to and from storage.
• The cost of storing household goods and personal effects while you are at the new job location.

The first two items were explained earlier under Moves to Locations in the United States. The last two items are discussed, later.

You can deduct the reasonable expenses of moving your personal effects to and from storage.

You can deduct the reasonable expenses of storing your household goods and personal effects for all or part of the time the new job location remains your main job location.

If you live and work outside the United States, you may be able to exclude from income part or all of the income you earn in the foreign country. You may also be able to claim a foreign housing exclusion or deduction. If you claim the foreign earned income or foreign housing exclusion, you cannot deduct the part of your moving expenses that relates to the excluded income.

Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, explains how to figure the part of your moving expenses that relates to excluded income. You can get the publication from most U.S. embassies and consulates, or see How To Get Tax Help at the end of this publication.