Date: 2007-03-21
Jackson Hewitt’s Weekly Tax-Time Tip:
Relocation expenses may be deductible if you moved for work in 2006
PARSIPPANY, N.J., March 21, 2007 – Jackson Hewitt Tax Service®, an industry leader providing full service individual federal and state income tax preparation, continues its weekly series, “Jackson Hewitt Tax Time Tips” – with important considerations for those who moved to a new home in 2006 as a result of a new job or a transfer by an employer.
This Week’s Tip: If you took a new position in 2006, or your company transferred you to a new area, many of the costs incurred for your move can be deducted on a 2006 individual income tax return. You can deduct certain job-related moving expenses if you met these conditions in 2006:
Time Limits: If you moved in 2006, you can probably claim moving costs that were incurred within a one year period from the date of your first day of work at the new location. If you moved to a new city and then found a new job, you may also be able to claim deductions, provided that you began working within a one year time frame following the move. Those who delayed a move because of a significant circumstance (such as allowing a child to finish high school) may still be able to deduct costs.
Distance Limits: In general, your move will meet the distance requirement if the new job that you took in 2006 was at least 50 miles farther from your former home than your old job location was from your former home. “If your former workplace was three miles from your former home and the new workplace is at least 53 miles from that home, you meet this test,” said Mark Steber, Vice President, Tax Resources for Jackson Hewitt Tax Service.
Taxpayers should also be mindful of requirements regarding how long they worked in a new position during 2006 to claim job-related moving deductions. Employees are required to have worked full time for at least 39 weeks during the first 12 months after arriving in the new location for a new job. Keep in mind that these 39 weeks you work do not have to be sequential, but you must work full time within the same general commuting area for all 39 weeks. Self-employed taxpayers must work for a total of at least 78 weeks during the first 24 months after arriving in a new area. The exceptions to this are if:
- You are in the Armed Forces and you moved because of a permanent change of station
- You moved to the United States because you retired
- You are the survivor of a person whose main job location at the time of death was outside the United States
- The job at the new location ends because of death or disability
- Your job at the new location ends because you were transferred for your employer’s benefit or were laid off for a reason other than willful misconduct.
Moving expenses incurred in 2006 that can be deducted include: costs for packing, crating and transporting household goods and personal effects; storing and insuring items within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home (“in-transit” storage); connecting or disconnecting utilities; and shipping your car and your household pets to a new home.
Finally, consumers should keep in mind those expenses that cannot be deducted. These include: any part of the purchase price of a new home, car tags, a driver’s license, expenses related to buying or selling a home (or getting or breaking a lease if renting), real estate taxes, security deposits, temporary living expenses, or pre-move house hunting costs.
“While starting a new job or moving to a new area can be stressful, taxpayers armed with the right information may discover a number of benefits when it comes time to file their annual tax return,” comments Steber. “One key to unlocking these job-related relocation deductions is just knowing where to look. That’s why visiting trained preparers at Jackson Hewitt can help ensure that benefits are not overlooked, and that all the proper paperwork and receipts are in place to claim these deductions.”
Additional information on these deductions, as well as others available to taxpayers, can be found at www.jacksonhewitt.com. To speak with a local tax preparer or locate a nearby Jackson Hewitt office, contact 1-800-234-1040.
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. (NYSE: JTX), with over 6,500 franchised and company-owned offices throughout the United States during the 2007 tax season, is an industry leader providing full service individual federal and state income tax preparation. Most offices are independently owned and operated. The Company is based in Parsippany, New Jersey. More information may be obtained at www.jacksonhewitt.com. To locate the Jackson Hewitt Tax Service office nearest to you, call 1-800-234-1040.
Contact:
Melissa Connerton
CooperKatz & Company
212-455-8001