Prepared by Worldwide ERC® Tax Counsel, Peter K. Scott
Peter Scott Associates
Current as of January, 2017
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 2016 is 19 cents per mile. (The deduction will decrease to 17 cents per mile for 2017).
- 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. Note that the costs for moving the goods into and out of storage remain deductible even if the goods are in storage more than 30 days.
- 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 $118,500 in 2016, you may have had too much deducted as contributions to Social Security. You can take a credit for the excess over $7,347 on line 71 of your Form 1040 tax return. However, you may still owe the additional 0.9% Medicare tax that went into effect in 2013 if combined wages from both employers exceeded $200,000, or if your wages combined with those of your spouse exceeded $250,000. In such a case, you will need to file Form 8959 to report the additional tax, which applies to amounts in excess of the thresholds above, and include it on line 62 of the Form 1040.
- 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 and made permanent by Congress in 2016.
- 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 2016. No deduction is available, however, if your adjusted gross income is more than $110,000.
- If the sale of your former principal residence was a “short sale,” and you were relieved of some of the mortgage debt by your lender, you may receive a Form 1099-C reporting that debt relief to the IRS. However, a provision of the tax code excusing tax on such relief for acquisition mortgage debt up to $2 million was extended through 2016 in late 2015, and no tax should be due.
The 2016 return will be due on Tuesday, April, 18, 2017. The normal April 15 filing date falls on a Saturday, which originally would move the filling deadline to Monday April 17. However, that day is Emancipation Day in the District of Columbia, a legal holiday. Therefore, the filing deadline moves to Tuesday, April 18.