Deductible moving expenses

[Margaret CPA in OH]

I am looking for some agreement of my analysis of the deductibility of client's moving expenses. I don't want to miss anything but think he is out of luck on a lot of stuff.

Client lost job in city A Dec. 2011. Drove to desired new job location, city B, 300 miles away for networking and job hunting. After some promising leads, moved to city B apartment to reduce travel (expenses to move basics) and placed excess items in storage for 8 months.

Finally obtained job in city C, 200 miles from city B. Had to get apartment in city C (city B apartment under lease) and stayed in city C during the week, then returned to city B on weekends to continue seeking better job there, I believe.

Hasn't yet moved remaining furniture from city A to city C due to space, I believe.

From Publ. 521, I think he can deduct only 1 month of storage and can deduct only the cost of moving things from city A to city B but it has been more than a year so maybe not at all.

I am confused as to deductible mileage for job search. There is certainly a lot! I feel terrible for this professional at age 63. In the past 5 years he has moved from Ohio to FL to MN to NC in transfers with airline industry HR then was finally 'downsized.' I suppose there are all too many in this situation but maybe not so many with these expenses.

Any insight would be much appreciated!

[Kea]

Yes, the storage cost are only one month.

But, I would think the moving costs could be taken for B to C, not A to B. He wouldn't meet the 39 week test for working in B but (hopefully) will for C. And he meets mileage test from B to C.

Can't help on the job search question off the top of my head.

[kcjenkins]

Perhaps this might help:

http://www.irs.gov/uac/Job-Search-Expenses-Can-be-Tax-Deductible

[Margaret CPA in OH]

Thanks, KC, but I don't see that actually moving to another place to look for work is deductible. The links reference travel to another place and the travel expenses to and from but not relocating. Surely many people relocate to look for work and don't just travel between. His situation is complicated by the first relocation then actually finding a job in yet a third place.

I have some questions out to him and will just have to ponder. Thanks again!

[Margaret CPA in OH]

I just received complicating update from client. It turns out he has been in city C for training for 6+ months. He was promised that he could work from city B after training and will, in fact, be returning at the end of this month

So now I see city C maybe as a temporary work assignment and employment away from his tax home. This would seem to qualify for deductible expenses. He returned to city B on weekends to keep contacts and not to continue job seeking. He looked around for appropriate permanent housing after training, among other things.

I still am confused as to his tax home because he always had the intent to move back to city B after training but couldn't afford to keep apartments in both places. So was his tax home city B or city C? Did he have temporary work/job assignment in city C or did he move there and it became his tax home until the end of this month when he will return to city B to reside permanently (I hope!)?

Poor guy has spent a bunch of money but it shouldn't all be deductible I would think. Don't want to overdo but also want to be fair as he was downsized originally from a job he thought he had until retirement.

Thanks for any additional input!

[MsTabbyKats]

Just my opinion...but it sounds like he lives in City B and has temporary living expenses in City C (training for 6 months is not a permanent situation).

A to B is moving expense.

C is temporary expenses

I also see a lot of job search expense there...all legit as long as it's in the same field.

[kcjenkins]

IF he kept a home in B while he was training in C, it would be deductible. If not, it's not.

[Margaret CPA in OH]

Thanks to you both. I first thought he kept a home in city B but couldn't afford it although he knew he would be back and will be in a couple of weeks. He does have a lot of expenses but how about the move from B to C and back to B? He originally moved to B intending to find a job there and stay. He found a job but had to go to C for training before he could permanently settle in B. He has a lot of storage expense but I think can take only 1 month. Since he had to move things for his training and lost his orginally intended home, wouldn't that be a moving expense as well as the move from A to B? It was way more than 50 miles and not a commuting distance.

I hope he stays put!

[MsTabbyKats]

Margaret-

I'm going to make this simple for you. Do what's best for your client as long as it makes sense and doesn't go overboard. If the IRS doesn't like it, let them figure it out.

For a moving expense....you have to move from one point to another point and start a new job in the second point.

Congress makes the laws. The IRS is responsible for collecting the tax. What's written in all the pubs are the guidelines from IRS (not the laws)...and open for interpretation. That's why there is tax court and tax lawyers. This was directly from an IRS agent at one of those conferences.

[Guest Taxed]

The usual questions that I get when doing moving expenses is "house hunting expenses" and prolonged storage costs while they are looking for a new place. I have the pubs open and highlight the examples IRS gives. People come up with airfares and hotel/meals receipts while they were checking out the new area.

Just did one yesterday where the storage cost was more than the cost of the Uhaul rental. Come to find out that the new apartment is not big enough for all their antique furniture and piano so they had it stored in a climate controlled furniture storage unit and the rent per month was $120. This is 8 months of storage they wanted to deduct and continue deducting until they found a large enough house??

[SFA]

Margaret-

I'm going to make this simple for you. Do what's best for your client as long as it makes sense and doesn't go overboard. If the IRS doesn't like it, let them figure it out.

For a moving expense....you have to move from one point to another point and start a new job in the second point.

Congress makes the laws. The IRS is responsible for collecting the tax. What's written in all the pubs are the guidelines from IRS (not the laws)...and open for interpretation. That's why there is tax court and tax lawyers. This was directly from an IRS agent at one of those conferences.

AMEN. In these types of cases, sometimes I find myself working too hard to figure out why it can't be done for the client and have to slap my self back into tyring to figure out how it works for the client. After our best efforts, let the IRS figure it out, and let the chips fall where they do.

[Margaret CPA in OH]

Thanks to you ALL! Yes, sometimes we/i get caught up in trying to do what we can within the law for our clients but have to draw a line somewhere. So my line will be to literally draw what transpired, put in code or other references as to what is deductible or not and go with it. On to the next knotty issue...