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How To Get The Most Of Your Moving Expense Deductions

How To Get The Most Of Your Moving Expense Deductions

The Internal Revenue Service (IRS) may be the bureaucratic organization that scares every taxpayer. However, it is sensitive to your income and all that impacts on it. Expenses are one of the things that impact your income. As such, the IRS tries to consider that in the amount of tax you have to pay to the government.


Relocating to another place is one such area of expenditure considered by the federal tax bureau. Under the moving expense deductions provision of the federal tax laws, you can deduct your moving expenses if this relocation is related in any way to starting a new job. The law also allows you to deduct the expenses incurred in the process if you are transferring to a new location for your present employer.


It is imperative to understand these provisions of the law to be able to take advantage of them. It is however difficult to fully comprehend the tax laws and that can make you bear certain burdens that you could otherwise ease off through a tax deduction. You need to find a tax professional such as The  Neal Group LLC in Greenfield, WI to help you befit from these tariff privileges.


The Neal Group LLC in Greenfield, WI in that case will help you with not just the information but the tax processing as well. From a tax preparer you will learn what it takes for you to qualify. For this deduction, you will qualify if your new work location is a sufficient distance from your original home. You also have to begin working shortly after you arrive at the new location.


This provision also tends to promote entrepreneurship. It allows those who are self-employed to be exempt from tax if they relocate to a new place. This means that you don’t necessarily have to be someone’s employee in order to enjoy the tax deduction. If you move even as a self-employed person, you still may be able to deduct your moving expenses.


The law emphasizes much on activity on the new location as opposed to the previous one. One may therefore qualify for the deduction as an employee or if they are self-employed.

The Neal Group LLC in Greenfield, WI reports your deduction and deductible expenses on the Moving Expenses Form 3903. Here are some ways in which you can take full advantage of the moving expenses deductions.


Ensure you pass the distance  and time tests


One has to meet two tests, the distance ad time tests in order for move to qualify. The distance test involves the distance from your original home to your new place of work. This distance must be a minimum of 50 miles further than the distance from your original home to your initial work place.


The time test on the other hand involves a minimum duration that has to be satisfied within at the beginning of your work in the new location. You meet the time test by working as a full-time employee in the new location for a minimum of 39 weeks during the first 12 months after you arrive in the place in general. This time duration can be aggregated for more than one employer.


The terms for a self-employed person are a little different. You satisfy the time test by working a total of at least 78 weeks during the initial 24 months after arriving at the new location in addition to working for the minimum of 39 weeks during your first 12 months. These 78 weeks can be an aggregate of time worked as a self-employed person and as an employee.


Ensure one person  meets the distance and time tests if married 


Marriage gives you an added advantage. If the husband or the wife or one member of a civil union has met the distance- time tests, the both of you can be free to deduct the moving expense deduction as you file your tax returns.


Consider special  cases


There are certain conditions that automatically give you a special advantage with regards to these legal privileges. If you lose your job for instance, you qualify for an exception to these rules. This is not the only condition that will make you qualify as a special case though. Let your tax expert such as The  Neal Group LLC in Greenfield, WI advice you appropriately on what other situations will make you qualify.

Being in the Armed Forces for instance allows you the privilege to not have to meet these two tests in case you are moving your move for a permanent change in station. This includes a move within one year after you leave active duty or retire.


Generally, one may deduct their own expenses of moving, that of their family and of their belongings. As such, you can deduct the cost of expert moving company services, pods or do-it-yourself moving trucks, standard moving mileage rate for gas and oil, cost or expenses of travelling by car and the cost of your packing supplies including tape, blankets, boxes and more.


If you satisfy any of the above conditions then you should take advantage of the moving expenses deductions law. It may just save you a great deal on the overall tax bill.

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