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What Are Moving Expenses?

Employers will sometimes pay some or all moving expenses when an employee relocates for a job.
Moving expenses may include packing materials, such as tape.
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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 18 December 2014
  • Copyright Protected:
    2003-2014
    Conjecture Corporation
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Moving expenses are the costs that are incurred when changing from one residence to another. In some situations, expenses of this type may be utilized as a tax write-off. At other times, moving costs may be absorbed by an employer, such as in situations where the employee relocates to a different city or town as a condition of continued employment or to take advantage of a promotion opportunity. There are also situations in which moving expenses are absorbed by the individual, and are not subject to tax breaks or recompense from an employer.

Many businesses help to offset moving expenses when an employee agrees to move to a new residence in a location that is far from his or her present home. The move may require that the employee move to a different region or even a different nation in order to accept job offered by the employer. As a means of aiding the employee in relocating, a business may offer some sort of up-front compensation to help with executing the move, or allow the employee to submit an expense report along with supporting documentation once the move is complete. Typically, businesses do tend to place some limitations on the types of expenses that may be claimed, and will disallow any line items that do not conform with the company’s guidelines for acceptable relocation expenses.

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In terms of taxes, moving expenses can sometimes be used as a deduction on annual tax returns. Most nations that do allow these types of expenses to be claimed as deductions will also provide guidelines that must be followed in order to claim the deduction. This means understanding which of those expenses incurred during the moving process are allowed, and which are not.

For example, current regulations may allow the taxpayer to claim a deduction if the move was over a minimum distance from the previous residence, and was necessary in order to start a new job. Some expenses, such as the cost of meals consumed during the move, may or may not be allowed. In most situations, tax regulations do not allow individuals to claim any portion of the moving expenses where the employer provided compensation to cover those moving expenses,

Before agreeing to move as part of an employment situation, it is a good idea to find out exactly what type of financial compensation the employer will extend to offset those moving expenses. At the same time, the employee should take the time to explore current tax laws that relate to utilizing uncompensated moving expenses as a tax deduction. Information of this type will often prove helpful in planning the move in the most economically feasible manner possible, allowing the individual to incur as little out of pocket expense as possible.

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