There are two types of
qualified moving expenses that may be deducted. They are:
(1) costs of moving household
goods and personal effects, and
(2) travel and lodging expenses
(excluding meals) incurred while moving to the new residence.
If you use your car or
a personal vehicle to transport people or belongings to the new
location, the automobile expenses are deductible either based on the
actual expenses incurred (fuel, tolls, etc.) or at a standard rate which
is 20 cents per mile for 2007. Reimbursements from the employer, for
“qualifying” moving expenses are usually excluded from the employee’s
gross income, but no deduction may be taken for reimbursed qualifying
moving expenses unless they are included in the gross income.
Reimbursements for unqualified moving expenses, reimbursement for loss
on the sale of a home, for example, must be included by the employer in
the employee’s gross income. Finally, moving expense reimbursements will
be treated differently depending on whether the employer has an
“accountable” or “nonaccountable” plan. If it is the former, the
reimbursement are for qualified moving expenses; the employee must
account to the employer for the expenses incurred, and excess
reimbursement are required to be returned to the employer, and
reimbursements other than for unqualified moving expenses are,
generally, not included in the employee’s gross income. Conversely, if
the employer plan is a “nonaccountable” plan, the employer
reimbursements are usually included in the employee’s gross income. The
rules are quite complicated, and if you have made a job change this year
and relocated, you might want to obtain some professional tax advice.
