As Clergy, God may call you to move to different congregations in the course of your career. When you accept a call, and you move outside your current area, the first thing you should do is see if the move is tax deductible.
Moving expenses are extremely important to a tax return. This is because a moving expense is considered an “above the line deduction”. This means that your expenses are directly subtracted from your income without the hassle and limitations of itemized deductions.
In order to take your moving expenses, you must pass three tests.
Your move takes place closely to the start of your new job.
Your new workplace must be at least 50 miles farther from your old home than your old job location was from your old home. If you previously did not work or have a workplace, then your new job location must be at least 50 miles from your old home. This is called the Distance Test.
You must work for at least 39 weeks in a full-time position during the first year following your arrival in your new job location. This is called the Time Test. However, you can deduct your moving expenses on your 2015 tax return even though you have not met the time in 2015. This is done if you expect to meet the 39-week test in 2016.
You may deduct the following as moving expenses:
Moving Truck Rentals
Cost of storage unit (up to 30 days due to availability of new home)
Mileage or actual expense on vehicle
Transportation of pets
Airline and/or train tickets
Lodging to your new home.
Please keep in mind that these expenses must be considered reasonable. Furthermore, if you make side trips for sightseeing, those trips are not deductible.
Finally, if you are reimbursed for any expenses, you must reduce your moving expense deduction by the amount reimbursed (unless you are taxed on the reimbursement).
Before deducting your moving expenses please consult Jacobson Clergy Tax Service to see if you actually qualify. We are always available and happy to discuss your tax situation. You can reach us by phone, (609) 375-8295, or through our website at jclergytax.com.