Arizona Moving Tax Deductions
As a general rule of thumb, you can deduct most, if not all, of your moving expenses if you move at least 50 miles away for work, but like any other tax-related subject, there are plenty of caveats and special circumstances that change the rules.
Hiring a professional moving company is probably more affordable than you think thanks to a large array of tax deductions that you can claim on your IRS returns.
How to Qualify!
To qualify for moving deductions, you will likely need to meet three requirements. Your move must be closely related in both time and physical proximity to your place of employment, and it must pass both the distance and time tests.
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Your move is closely related to the start of work - The first requirement simply limits your deduction to any moving expenses you incur within one year of starting work, and your new home must be closer to your new job than your old home. In other words, you can deduct any qualifying expenses up to one year before and after you start work. You don't have to have a new job lined up when you move, but you must start work at a new location within one year of moving if you want to deduct those expenses. In addition, you can't deduct moving expenses if you will continue working at the same address, but you can continue working for the same company if you're transferred to a new job location. Your new home must be closer to your new job unless your employer requires you to live at your new home. You are also exempt from this rule if you can prove that your new home shortens your commute. For example, your new home actually adds an extra 10 miles to your commute, but because it's in a less populated area of the state, your new home shaves 20 minutes off your daily commute.
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Distance test- Compared to the first requirement, the distance test is fairly straightforward. Your new job location must add at least 50 miles to your commute from your former home. Let's look at two examples: Your daily commute between your former home and former job was 30 miles each way, and your new job is located 70 miles away from your former home. Your new job only increases your daily commute by 40 miles, so you don't meet the distance test requirement. In the second example, your former commute was only 5 miles, and your new job is 60 miles away from your former home. If you remained in your former home, you'd increase your commute by 55 miles, so you do pass the distance test.
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Time test -The time test simply requires that you work full time at least 39 weeks out of the first 12 months that you reside at your new address. Those 39 weeks don't have to be continuous, and you don't need to work for the same employer, but you do need to stay in the same general commuting area. Are you self-employed? If so, the 39-week time test doubles, so you'll need to work full time at least 78 weeks out of the first 24 months after your move.
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Qualifying Expenses
By and large, all of your moving expenses are tax deductible if you meet those requirements. ​
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Basic expenses include things like packing materials, professional transportation and handling of your belongings, and travel costs between your former home and new home. You can either keep a detailed journal of all your travel expenses, excluding food, or you can use the default rate of 23 cents per mile. However, you can only deduct a single trip, and you can't deduct expenses related to vehicle maintenance, sightseeing, or other costs not directly related to your move.
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Don't forget to deduct your expenses for disconnecting your utilities at your former home and connecting them at your new address.
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Need to rent a storage unit? Storage costs are deductible as long as they occur within 30 days of your move.
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You can also deduct pet transportation costs.
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If you had to stay an extra day at your old residence after your belongings have been moved, you can deduct the lodging expenses.
Special Rules
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Members of the U.S. armed forces don't need to meet the three general requirements if they're moving because of a military order or a permanent change of station. Retiring members also qualify for moving deductions if they're moving from their last permanent station to a new home.
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Married couples filing jointly still need to meet the three basic requirements, but they can do so separately. For example, one spouse can fulfill the distance test, and the other can satisfy the time test. However, they cannot add their time together to meet the time requirement. One spouse must work full time at least 39 weeks out of the first year.
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Is your employer footing part or all of the bill for your move? You cannot deduct any reimbursed expenses from your tax return, but that's OK. You can still deduct any unreimbursed expenses, and reimbursed costs will end up saving you more money than tax deductions.