Getting a new job is an exciting prospect. For some, this requires moving to a new area and potentially selling an old home. These are big life changes that often come with a number of questions, some of the more common follow.
Are there any tax benefits to moving for work? In some cases, the answer is yes. Moving expenses may qualify for a tax deduction. There are certain criteria that must be met in order for the move to qualify for a deduction.
Two of the main examples noted by the Internal Revenue Service (IRS) involve timing and distance. Basically, as long as the move occurs within about a year of starting up a new job and is at least 50 miles away from your previous home city, the costs can likely qualify for a deduction.
What if my employer reimburses me for the move? It is not uncommon for an employer to cover the cost of the move either through a stipend or by sending a moving company out to aid with the move. The IRS may consider this reimbursement a form of income and expect it to be included in your tax return paperwork.
What if I need to sell my current home? There are a number of tax consequences that can come with selling a home. If the home was a primary home for at least two years, it is likely that you will be able to exclude any income made from selling the home. This generally holds true for up to $250,000 in gain for an individual, or $500,000 if selling as a couple.
What if the IRS contacts me about the job or sale? If the IRS contacts you with questions about your taxes involving these steps, it is wise to seek legal counsel. The agency may be moving forward with an audit. If this is the case, an attorney can advocate for your interests, working to better ensure that your rights are protected during the process.