Question

Jill graduates from NTC and finds a job in an Eau Claire, Wisconsin accounting firm. Jill had an apartment near campus while in school. In this move she spends the following amounts:

Cost of moving furniture and household goods $800

Moving Mileage 110

Meals $75

Lodging $85

What is Jill's total qualified moving expenses and how did you compute them?

Answer 1

Answer

Conditions for getting deduction of Moving expenses.

If move due to a change in your job or business location, or because you started a new job or business.

Person eligible to deduct reasonable moving expenses but not any expenses for meals. Person can deduct its moving expenses if you meet all three of the following requirements:

• Your move closely relates to the start of work - Person move must closely relate both in time and in place to the start of work at your new location. Person can consider moving expenses incurred within one year from the date you first reported to work at the new location as closely related in time to the start of work.
• You meet the distance test – Person new workplace must be at least 50 miles farther from your old home than your old job location was from your old home. If you had no previous workplace, your new job location must be at least 50 miles from your old home.
• You meet the time test - If you're an employee, you must work full-time for at least 39 weeks during the first 12 months immediately following your arrival in the general area of your new job location. If you're 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 immediately following your arrival in the general area of your new work location subject to some exceptional conditions i.e. If you start your new job months before your family moves to the new location because of special circumstances, such as a spouse who is receiving medical care or a child who is finishing school near your old home, you can still deduct your moving expenses despite the fact that your move occurs long after your first day of work.

Qualifying expenses

All of the expenses you claim must be both reasonable and necessary to your move. Reasonable moving expenses may include the cost of gas or the mileage on your vehicle, rental trucks, short-term storage, and boxes. For a long move, you might include the cost of lodging at a hotel on the way to your new home.

Conclusion

Based on above applicable provisions and conditions Jill’s total qualified moving expenses would be Cost of moving furniture and household goods $800 and Lodging $85 i.e. total $885 assuming Jill’s meet the time test.