Prepared by Worldwide ERC® Tax Counsel, Peter K. Scott
Peter Scott Associates
Current as of November, 2011
Here are several items deductible as moving expenses that are sometimes overlooked:
- Tips to the moving van driver or helpers.
- Mileage for driving second or third cars to the new location (in addition to the first car). The deduction for 2010 is 16.5 cents per mile. (The deduction will increase to 19 cents per mile for 2011).
- Lodging expenses in the departure location for one night after the household goods are packed, and one night in the new location on the day of arrival.
- Moving household goods from a location other than your main home, up to what it would have cost to move them from the main home
- Storage of household goods for up to 30 days, including the cost of moving the goods into and out of storage.
- Expenses not reimbursed by your employer, such as extra crating, shipment of unusual items, tips to van line staff, etc.
And remember: You don’t have to itemize to deduct moving expenses.
Other filing season tips:
- If the seller of your new house agreed to pay part of your mortgage points instead of reducing the sales price, IRS says you can deduct those points, even though the seller paid them.
- If you ever refinanced your mortgage, don’t forget to deduct the entire remaining balance of points paid on the refinancing in the year you sell your home.
- If your new job is for a different employer, and you earned more than $106,800 in 2010, you may have had too much deducted as contributions to Social Security. You can take a credit for the excess over $6,621.60 on line 69 of your Form 1040 tax return.
- If you moved to one of the states with state and local sales taxes but no general income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming) you may benefit from an itemized deduction for state sales taxes. The deduction was reauthorized by Congress for 2010 and 2011 at the end of 2010.
- If you paid a premium for mortgage insurance, you may be entitled to an itemized deduction as mortgage interest for the portion of the premium allocable to 2010. No deduction is available, however, if your adjusted gross income is more than $110,000.
- If you signed a contract to buy a home before May 1, 2010, and closed the purchase by September 30, 2010, you may be entitled to a first time home buyer credit of up to $8,000 if you had not owned a home during the preceding three years. For purchases after November 6, 2009, a credit up to $6,500 may be available for purchasers who already owned a principal residence and who lived in it for at least five consecutive years of the eight years preceding the new purchase. However, first-time homebuyers who claimed the credit in 2008 will have to begin repaying it on their 2010 returns. Similarly, if you sold your home or stopped using it as your principal residence in 2010, you may have to repay on the 2010 return the entire credit taken. See IRS Form 5405 and its Instructions for details.
IRS has announced that 2010 returns will not be due until Monday, April 18, 2011. However, IRS has also announced that because of changes to the law that did not occur until late in 2010, some of its systems will have to be reprogrammed and it will not be able to process any returns including itemized deductions on Schedule A, deductions for higher education tuition and fees, or deductions for education expenses, until mid-to-late February. It advised taxpayers in those categories not to file their returns until IRS tells them it is ready to process those returns.