Form 3903 is the moving expenses tax deduction that may be taken if a person moves at least 50 miles away from a present location for a new job and has worked or will work full-time for at least 39 weeks in the next 12 months after the move. It is filed with the US Internal Revenue Service (IRS) 1040 or 1040A and it doesn’t require itemizing deductions. The deduction can be taken by people changing jobs, by the self-employed, and by people getting a new job, like college students. It makes certain expenses deductible from taxable income, though not all of them.
Filling out Form 3903 is relatively self-explanatory. The form features both time and distance tests that help prove that the deduction is allowable. The distance test essentially means that the new jobs must be in a location approximately 50 miles from present work situation, and the time test refers to the above requirements that workers will remain at their new job for a set period. There may be exceptions to this rule if a worker is laid off through no fault of his or her own or a company asks a worker to relocate back to an old work location.
The one thing that can be confusing about Form 3903 is if a company compensates employees for moving. If that compensation is treated like other work pay and shows up on a yearly W-2, employees can use Form 3903. If it’s treated as non-income, taxpayers shouldn’t try to take the federal deduction too, since they’ve already been compensated for their move without needing to pay taxes on that money.
The types of things generally considered deductible as moving expenses including moving all possessions, renting vans, employing movers, and possibly renting storage for short periods. Mileage from present home to new home is included and overnight stays, if needed, in hotels or motels can also be deducted. Travel of all family members to the new home is also part of deductible expenses, even when family members don’t travel together. Things that Form 3903 excludes as eligible expenses are any extraneous trips (like sightseeing), on the road food costs, expenses for purchase or remodeling of homes, costs to look for new homes, or money spent for deposits on new lodgings.
It’s possible to use Form 3903 in the same year of a move, even if people haven’t yet met the time requirement. If for some reason, this requirement wasn’t met later, it involves extra work for the taxpayer. He or she must amend the return and remove any deductions for moving expenses. People can also use the form after both time and distance requirements are met and file it a year later. Taxpayers can use this deduction more than once — provided IRS tax laws remain the same — if they end up relocating for jobs more than one time and meet all qualifications.
