Friday, March 16, 2007

Moving Expenses are Tax Deductable

For some reason I've never taken this deduction, allthough I've moved around a few times for school within the past few years. However, I have just gotten started on my 2006 tax return and I noticed that there was a "moving expenses" deduction. My wife moved from out of state to marry me and take a new job in NYC this year, and I'm going to be sure to deduct some of the related expenses (we're filing jointly).

Her previous home is a few hundred miles away from here, and she took two trips that I would call "moving-related," one to specifically take a weekend apartment hunting with me, and another to move most of her stuff via her car. I am going to deduct mileage and tolls for these trips.

It ends up being a small deduction, but I think I'm already taxed at a ridiculously high rate, so I'm going to keep as much of my hard-earned money as i possibly can.

There are many sites on the internet that list "deductable" moving expenses, but I've found that many of these stretch the rules (for example, the IRS says that the cost of meals during a move is not deductable but some sites say that it is). Your best bet is to thoroughly read the most recent IRS publication 521 and keep good records during your move. I am not a believer in risky tax strategies, especially for the $100 or so of income my moving expense deduction is going to end up being.

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