As a wave of Precision Scheduled Railroading runs through Class 1 railroads, many employees are asked to relocate to a new city. Some former railroad employees are forced to move to in order take a position for a new employer.These moves can be very unsettling for everyone involved. Relocating can be a very expensive proposition so understand the tax deductions that are afforded railroaders who move for employment.
If you’re relocating for your job there can be many positive aspects to joining a new team, some of which might surprise you. One of the best parts? Discovering the potential to have your moving costs covered along with the heavy lifting involved.
Keep Distance In Mind
It’s more likely that if you’re starting a new job across town or moving to be a little closer to work you won’t be the best candidate to receive a deduction.
According to IRS rules, your new job must be at least 50 miles farther away from your old house than your old job was.1 If you’re planning on moving farther from a new job, don’t count on receiving a deduction either, unless you can provide proof of various circumstances. For the most part, financial assistance is provided to those making an incredible effort to relocate for job purposes.
Get to Work
Moving can be stressful, and very often one of the last things we might think about are the finances or deductions available to us at the time. If you’re starting a new job or moving away from home or school there are very likely a mountain of items on your to-do list that don’t include unpacking extra savings.
In most cases, moving expenses can only be deducted within a year of starting a new job. There are special considerations to this general rule, so be sure to check the IRS website for additional details.
In order to deduct your moving expenses, you will need to work full-time hours for at least 39 weeks during the first year of your move. Working for the same company isn’t necessary, and the timing doesn’t need to be consecutive but you must work in the same general commuting area to be considered, according to the IRS.2
Keep in mind that if you move and write off your expenses, but ultimately decided to move back soon after, you will need to reverse the deduction. Details such as these include amending your tax return, which can be very tricky to do properly. It’s important to make your move, and your finances, count in the long run.
Keep It Simple
There is a wide variety of moving costs that can be deductible. The cost of hiring movers, transportation and lodging, as well as storage costs, can often be write-offs and should be considered when making your big move.
It is important to keep in mind that while there are many beneficial deductions, there are also many moving factors that cannot be deducted. DMV expenses, home improvements, security deposits, etc. are a small sampling of what won’t make the cut when it comes to your tax break.
Make sure you have money set aside in a emergency fund just in case unforeseen situations arise. If you need assistance in budgeting and tax planning for your move to a new location. Please schedule your free 30 minute meeting with Highball Advisors.
Photo by Paul Sykes
Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved.from Highball Advisors, and all rights are reserved.