Publication 17
Your Federal Income Tax

For Individuals

For use in preparing 2002 Returns

Deductible Moving Expenses

If you meet the requirements discussed earlier under Who Can Deduct Moving Expenses, you can deduct the reasonable expenses of:

1. Moving your household goods and personal effects (including in-transit or foreign-move storage expenses), and
2. Traveling (including lodging but not meals) to your new home.

You cannot deduct any expenses for meals.

Reasonable expenses.   You can deduct only those expenses that are reasonable for the circumstances of your move. For example, the cost of traveling from your former home to your new one should be by the shortest, most direct route available by conventional transportation. If, during your trip to your new home, you stop over, or make side trips for sightseeing, the additional expenses for your stopover or side trips are not deductible as moving expenses.

Travel by car.   If you use your car to take yourself, members of your household, or your personal effects to your new home, you can figure your expenses by deducting either:

1. Your actual expenses, such as gas and oil for your car, if you keep an accurate record of each expense, or
2. The standard mileage rate of 13 cents a mile.

Whether you use actual expenses or the standard mileage rate to figure your expenses, you can deduct parking fees and tolls you paid in moving. You cannot deduct any part of general repairs, general maintenance, insurance, or depreciation for your car.

Member of household.   You can deduct moving expenses you pay for yourself and members of your household. A member of your household is anyone who has both your former and new home as his or her home. It does not include a tenant or employee, unless that person is your dependent.

Location of move.   There are different rules for moving within or to the United States than for moving outside the United States. This chapter only discusses moves within or to the United States. The rules for moves outside the United States can be found in Publication 521.

Household Goods and Personal Effects

You can deduct the cost of packing, crating, and transporting your household goods and personal effects and those of the members of your household from your former home to your new home. If you use your own car to move your things, see Travel by car, earlier. You can include the cost of storing and insuring household goods and personal effects within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home.

You can deduct any costs of connecting or disconnecting utilities required because you are moving your household goods, appliances, or personal effects.

You can deduct the cost of shipping your car and household pets to your new home.

You can deduct the cost of moving your household goods and personal effects from a place other than your former home. Your deduction is limited to the amount it would have cost to move them from your former home.

You cannot deduct the cost of moving furniture you buy on the way to your new home.

Travel Expenses

You can deduct the cost of transportation and lodging for yourself and members of your household while traveling from your former home to your new home. This includes expenses for the day you arrive.

You can include any lodging expenses you had in the area of your former home within one day after you could no longer live in your former home because your furniture had been moved.

You can deduct expenses for only one trip to your new home for yourself and members of your household. However, all of you do not have to travel together or at the same time. If you use your own car, see Travel by car, earlier.

Nondeductible Expenses

You cannot deduct the following items as moving expenses.

• Any part of the purchase price of your new home.
• Car tags.
• Driver's license.
• Expenses of buying or selling a home.
• Expenses of getting or breaking a lease.
• Home improvements to help sell your home.
• Loss on the sale of your home.
• Losses from disposing of memberships in clubs.
• Meal expenses.
• Mortgage penalties.
• Pre-move househunting expenses.
• Real estate taxes.
• Refitting of carpets and draperies.
• Security deposits (including any given up due to the move).
• Storage charges except those incurred in transit and for foreign moves.
• Temporary living expenses.

No double deduction.   You cannot take a moving expense deduction and a business expense deduction for the same expenses. You must decide if your expenses are deductible as moving expenses or as business expenses. For example, expenses you have for travel, meals, and lodging while temporarily working at a place away from your regular place of work may be deductible as business expenses if you are considered away from home on business. Generally, your work at a single location is considered temporary if it is realistically expected to last (and does in fact last) for 1 year or less. See Temporary Assignment or Job in chapter 28 for information on deducting your expenses.

How To Report

The following discussions explain how to report your moving expenses and any reimbursements or allowances you received for your move.

Form 3903.   Use Form 3903 to report your moving expenses.

Where to deduct.   Deduct your moving expenses on line 28 of Form 1040. The amount of moving expenses you can deduct is shown on line 5 of Form 3903.

You cannot deduct moving expenses on Form 1040EZ or Form 1040A.

Reimbursements.   If you received a reimbursement for your moving expenses, how you report this amount and your expenses depends on whether the reimbursement was paid to you under an accountable plan or a nonaccountable plan.

For more information on reimbursements, see Publication 521.

When To Deduct Expenses

If you were not reimbursed, deduct your allowable moving expenses either in the year you incurred them or in the year you paid them.

Example.   In December 2001, your employer transferred you to another city in the United States, where you still work. You are single and were not reimbursed for your moving expenses. In 2001, you paid for moving your furniture. You deducted these expenses in 2001. In January 2002, you paid for travel to the new city. You can deduct these additional expenses in 2002.

Reimbursed expenses.   If you are reimbursed for your expenses, you may be able to deduct your allowable expenses either in the year you incurred them or in the year you paid them. If you use the cash method of accounting, you can choose to deduct the expenses in the year you are reimbursed even though you paid the expenses in a different year.

If you are reimbursed for your expenses in a year after you paid the expenses, you may want to delay taking the deduction until the year you receive the reimbursement. If you do not choose to delay your deduction until the year you are reimbursed, you must include the reimbursement in your income.

Choosing when to deduct.   If you use the cash method of accounting, which is used by most individuals, you can choose to deduct moving expenses in the year your employer reimburses you if:

1. You paid the expenses in a year before the year of reimbursement, or
2. You paid the expenses in the year immediately after the year of reimbursement but by the due date, including extensions, for filing your return for the reimbursement year.

How to make the choice.   You can choose to deduct moving expenses in the year you received reimbursement by taking the deduction on your return, or amended return, for that year.

You cannot deduct any moving expenses for which you received a reimbursement that was not included in your income. (Reimbursements are discussed in Publication 521.)

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