Tuesday, January 30, 2007

New to the Lehigh Valley and started a new job? Tax breaks are in your future.

Were you one of the 25 million tax-paying Americans who changed homes in 2006? If so, you might be due big tax savings. Your household moving expenses can be deducted as an adjustment to gross income.

Deductible expenses include any direct household moving costs, such as hiring a moving van, shipping expenses, moving insurance, and airline, train or bus fare to your new city. If you drive, you can deduct gasoline and oil bills. The cost of lodging en route (but not meals) is also deductible.

To qualify, however, you must have also changed your job location last year. You could have started work with a new employer or even just switched locations for the same employer. If you became self-employed or started your first job, you are also eligible. It must be full-time work.

Your new job site must be at least 50 miles farther away from your old home than was your old job location. So if you lived five miles from your old job in your old home, the new job must be 55 miles (five miles plus the required 50) from your old home.

The other rule requires that you reside in the area of your new job and work full time for at least 39 weeks out of 52 after you change homes. Self-employed? You must have worked in the vicinity of your new job full time for 78 weeks out of 104 after moving.

Once you are sure you're eligible, you can file an amended return on IRS Form 1040X and claim the deduction then.

More here.

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