If you moved in connection with your job or business and started a new job, you may be able to take Moving Expenses deduction. To be deductible, you must meet the distance and time tests. Your move must be closely related to the start of work. (Exception: Different rules may apply if you are a member of the Armed Forces or a retiree or survivor moving to the United States.)

You can generally consider moving expenses incurred within 1 year from the date you first reported to work at the new location as closely related in time to the start of work. It is not necessary that you arrange to work before moving to a new location, as long as you actually go to work in that location. If you do not move within 1 year of the date you begin work, you ordinarily cannot deduct the expenses unless you can show that circumstances existed that prevented the move within that time.

If the new workplace is outside the United States or its possessions, you must be a U.S. citizen or resident alien to deduct your expenses. Also if you qualify to deduct expenses for more than one move, use a separate Form 3903 for each move.

Deductible Moving Expenses

You can deduct the reasonable expenses of moving your household goods and personal effects to your new home. You can also deduct the expenses of traveling to your new home, including your lodging expenses. You cannot, however, deduct meals. You can deduct moving expenses you pay for yourself and members of your household. The members of the household do not have to travel together or at the same time. But you can only include expenses for one trip per person. 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.

You can deduct amount you paid to pack, crate, and move your household goods and personal effects. You can also include the amount you paid to store and insure household goods and personal effects within any period of 30 days in a row after the items were moved from your old home and before they were delivered to your new home.

The costs of meals during the move are not deductible, nor are the costs of selling your old house and buying your new house. Further, any costs of trips made prior to the move to look for an apartment or house are also not deductible. You can’t deduct cost of sightseeing trips.

The Distance Test

Your new workplace must be at least 50 miles farther from your old home than your old home was from your old workplace. If you had no former workplace, your new workplace must be at least 50 miles form your old home.

The Time Test

If you are an employee, you must work full–time for at least 39 weeks during the 12 months right after you move. If you are self–employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you move. If you are married, file a joint return, and both you and your spouse work full-time, either of you can satisfy the full-time work test. However, you cannot add the weeks your spouse worked to the weeks you worked to satisfy that test. There are exceptions to the time test in case of death, disability and involuntary separation. There are exceptions to the time test in case of death, disability and involuntary separation.

If you incurred moving expenses in 2007, you must claim them in 2007 even when you expect to meet 39 weeks test in 2008. If later you are unable to meet 39 weeks test, then you must file an amended tax return. 

Standard Mileage Rate

For 2007, the standard mileage rate for using your vehicle to move to new home is 20 cents a mile.

Moving expenses are figured on Form 3903 and deducted as an adjustment to income on line 26 of Form 1040 or line 26 or 1040NR. You cannot deduct any moving expenses that were reimbursed by your employer.

For additional information, refer to the Form 3903 Instructions and Publication 521, Moving Expenses.