Post-RRA moving expenses.

• Author: Metz, Michael L.
• Position: Revenue Reconciliation Act of 1993

Generally, individual taxpayers are allowed to deduct moving expenses connected with the commencement of work as an employee or as a self-employed individual at a new principal place of work, with various limitations and conditions. The Revenue Reconciliation Act of 1993 (RRA) made substantive changes to the moving expense deduction. There were changes to the definition of deductible moving expenses, the distance requirement, the reporting of the deduction and the treatment of reimbursed or employer provided moving expenses. These changes are effective for moving expenses incurred after 1993.

Moving expenses that qualify for deduction continue to include the reasonable cost of moving household goods and personal effects from the former residence to the new residence plus traveling, including lodging but excluding meals, from the former residence to the new residence. Reasonable expenses are those reasonable under the circumstances of the particular move. Expenses exceeding a reasonable amount are not deductible. Generally, moving and travel must be by the shortest and most direct route available from the old to the new residence "by the conventional mode or modes of transportation actually used and in the shortest period of time commonly required to travel the distance involved by such mode" (Regs. Sec. 1.217-2(b)(2)(i)).

Besides meals, various previously deductible moving expenses no longer qualify for deduction. Costs of premove househunting trips and temporary living expenses at the new location are no longer deductible. Expenses connected with buying or selling a home (or certain lease expenses), such as legal fees, title charges, real estate commissions, appraisal fees and similar expenses are also no longer deductible.

To qualify for the moving expense deduction, the taxpayer must be employed full time for a minimum of 39 weeks during the 12-month period immediately following the arrival in the new location. Self-employed individuals must meet this 39-week test, as well as perform self-employed services full time for a minimum of 78 weeks during the 24-month period following arrival in the new location.

In addition, the distance between the taxpayer's former residence and the new principal work place must be at least 50 miles further than the distance between that residence and the taxpayer's old principal work place. If there was no old principal work place, the new principal work place must be at least 50 miles from the...