Deduct Cost of Transporting Car as a Moving Expense?


Dear Tax Talk, 

I am moving to New York from Georgia for a job and will be flying. I would like to ship my car, but it is a bit expensive. I can easily pay one of my family members or friends to drive the car to New York for me. If I do that, can I deduct the transportation of my car as a moving expense even if I pay someone to drive the car? 

- Ariya

Dear Ariya,

If you meet the "distance and time test," then you can deduct the reasonable expenses of paying someone to drive your car from Georgia to New York as a moving expense.

The "distance test" is satisfied if your new principal workplace is at least 50 miles farther from your old home than your old workplace was. The "time test" is satisfied if you are an employee who works full time in the general area of your new workplace for at least 39 weeks during the first 12 months after you move. If you are self-employed, then you are subject to the same 39-week rule, but additionally you must work a total of at least 78 weeks during the 24-month period after you move.

IRS Form 3903, Moving Expenses, is where you claim the deductions. You are allowed transportation and storage of household goods and personal effects along with travel from your old home to your new home. Keep in mind that meals are not includible.

Thanks for the great question and congratulations on your new job.

Ask the adviser

To ask a question on Tax Talk, go to the "Ask the Experts" page and select "Taxes" as the topic. Read more Tax Talk columns.

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Taxpayers should seek professional advice based on their particular circumstances.

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.

Copyright 2014, Bankrate Inc.