Relocating to Apartments in Phoenix – Potential Tax Benefits
Are you relocating to Phoenix from another city for a new job? Moving can be exciting, stressful and expensive, but did you know that you may be able to deduct certain expenses related to your move on your Federal tax return?
There are three requirements which must be met in order to deduct move related expenses according to IRS publication 521:
- The move is closely related to the start of work.
- Meeting the distance test.
- Meeting the time test.
The first test requires that your moving expenses are incurred within one year from the date you first reported to work at your new job location.
The second test relates to distance. For example if you move to Phoenix, AZ from Boulder Creek, CA you could qualify if your new job is at least 50 miles more from your old home than your old job was you could qualify. For example, if your old job was 20 miles from your old apartment, but your new job is 70 or more miles from your old apartment, you could qualify to deduct certain expenses provided you meet the other two tests.
The third test relates to the amount of time you work at that new job in the new location. You must work full time for at least 39 weeks during the first 12 months after you arrive at your new work location. All of the rules relating to this test are listed in IRS publication 521.
The expenses you may be able to deduct include the cost of moving you and the members of your household from your old apartment in Boulder Creek to your new apartment in Phoenix and the costs of moving your household goods. In addition, you can deduct the cost of shipping your car and for transporting your pets from your old home to your new home. If you choose to drive your car from your old home to your new home you may deduct the actual expenses you pay for gas or calculate your deduction using the standard mileage rate for moving (see IRS publication 521for current rates).
There are some expenses that cannot be deducted. You cannot deduct the cost of moving any furniture you acquire on the way to your new home or expenses related to entering or breaking a lease, or pre-move apartment search or house-hunting trips to Phoenix. There is a more complete list in IRS publication 521.
Also note that moving expenses which are deductible under federal law and are incurred to move into Arizona by an individual who is establishing Arizona residency are deductible on the Arizona income tax return according to the Arizona Department of Revenue’s website.
The aforementioned information is not tax advice but simply explanation and illustration of tax information available from IRS. For more details on move related expenses consult the IRS website at irs.gov. Any taxpayer reading this information should seek advice based on the taxpayer's particular circumstances.
Good luck with your relocation to Phoenix!
