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Form 3903: All You Need to Know About Moving Expenses

Form 3903: All You Need to Know About Moving Expenses

Taxpayers use form 3903 to deduct moving expenses involved in a new job. This deduction, however, is no longer applicable to all taxpayers. A couple of years ago, Uncle Sam came up with some restrictions on who can claim the exception and file Form 3903.

For every qualifying move a taxpayer makes in a tax year, he will need Form 3903. With this, you will fill three forms if you move to three different job locations in a year, provided you merit other qualifications. With this form, the taxpayer can deduct other acceptable moving expenses like traveling to a new home and hiring a moving company. Examples of qualified expenses are:

  • The cost involved in buying tape, boxes, wraps, moving blankets and other packing essentials

  • Fees for renting moving trucks

  • Travel costs like air ticket, hotel costs, gas, and other transportation costs.

  • Cost of transporting other family members.

You must meet some requirements to file form 3903 as of 2018. Some of the requirements are:

  1. Your new job's location must be more than 50 miles away from the distance between your old job and former house. With this, if your previous post was 8 miles away from your home, your new job has to be 58 miles away from your old house.

  2. Your time of movement should coincide with when you commenced the new job. With this time test qualification, filers must work at least 39 weeks of the 52 weeks after the move at the new job. If you cannot make 39 weeks on the new job by the filing deadline, you might still file form 3903.

Self-employed people can also file form 3903. It, however, comes with a restrictive time test. In the first year after the move, they must work for 39 weeks and 78 weeks by the second year. They must also meet the distance and time test to determine if they merit the deduction. 

How to File Form 3903: Moving Expenses

There should be a qualifying time and distance test before you get to deduct your moving expense. In addition to the distance specified above, there is a 39-week seasoning period as well. There are acceptable reasons for exempting the seasoning period. This includes transfer, disability test, or employment loss.  

Members of the armed force do not need the time requirement or qualifying distance test when using the deduction. 

You can consult with an experienced tax pro to determine if you are eligible for the deduction. There is more information on the Internal Revenue Service (IRS) website. The form is equally available on the IRS website for all who wish to download. 

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