Write off Moving Expenses
If you moved to take a job during 2005, you probably can deduct part of the cost of the move even if you don't itemize on your tax return -- and even if the move was to take your first job after college.
Unlike job-hunting expenses, which can't be deducted when you're looking for your first job, there is no such restriction on moving expenses. And, because the moving expense deduction is an "adjustment to income" -- just like the write-off for student loan interest and deductible IRA contributions -- it's available regardeless of whether you itemize deductions.
There are some restrictions, though. The move must be job-related and, basically, must have covered at least 50 miles. Actually, Congress has come up with a convoluted test: The new job must be at least 50 miles farther from your old home than your old job was from your old home. When your first job is involved, the new job has to be at least 50 miles from your old home. If you used to commute 10 miles each way to your old job, then your new job location has to be at least 60 miles away from your old home. Got it?
If you qualify, you get to write off the cost of getting yourself, your family and your household goods to the new location -- including a mileage allotment if you drove your own car. For 2005 moves, the per-mile rate differs depending on when you moved. For moves during January through August, the rate is 15 cents a mile. For moves in September through December, the IRS hiked the rate to 22 cents a mile to acknowledge soaring gasoline prices.
Deducting $1,000 of moving expenses saves you $150 in taxes, if you're in the 15% tax bracket. And if you don't itemize, you still get the full standard deduction. If you do itemize, this break comes on top of the savings you get for writing off your other allowable expenses.
Report your moving expenses on Form 3903 and send it in along with your return.
NOTE: Kevin McCormally will begin his annual series of tax commentaries for Nightly Business Report this evening. He'll appear on the program every Monday between now and the tax deadline: April 17. Visit www.pbs.org/nbr/ to learn when Nightly Business Report is broadcast on your local public television station.