FYI: Writing off med school moving costs

[group_theory]

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In case you are wondering if you can write off the cost of moving to a new city for medical school, the simple answer is NO.

http://www.bankrate.com/brm/itax/tax_adviser/20040210a1.asp

Dear Tax Talk,
My wife moved this year to Grenada for medical school and she will be living there for two years. We incurred a lot of moving costs (around $2,000). Can I claim this under the moving expenses on line 27 of 1040? Please advise.
Sincerely,
Jinu


Dear Jinu,
You can deduct your moving expenses if you meet all three of the following requirements:

1. Your move is closely related to the start of work.
2. You meet the distance test.
3. You meet the time test.

Although you may meet the distance test, since the move was education related and not connected to the start of work, the moving expenses would not be deductible. If you moved with her to start a new job in Grenada, then you can claim the moving expenses as related to the start of work.

But your new job also has to meet the time test in order to qualify. The time test relates to employment in the area that you moved to. The test is different for employees and self-employed individuals.

If you are an employee, you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location (39-week test). Full-time employment depends on what is usual for your type of work in your area.

For purposes of this test, the following four rules apply:

1. You count only your full-time work as an employee, not any work you do as a self-employed person.
2. You do not have to work for the same employer for all 39 weeks.
3. You do not have to work 39 weeks in a row.
4. You must work full time within the same general commuting area for all 39 weeks

If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you arrive in the general area of your new job location (78-week test).

For purposes of the time test for self-employed persons, the following three rules apply.

1. You count any full-time work you do either as an employee or as a self-employed person.
2. You do not have to work for the same employer or be self-employed in the same trade or business for the 78 weeks.
3. You must work within the same general commuting area for all 78 weeks.

A student cannot be considered self-employed. Moving expenses are claimed on Form 3903.

(posted on Bankrate.com on Feb 10, 2004)

 

[edmadison]

Nothing new here; mpp and I have been telling people this for several years (including quotes from the IRS code).

Ed

 

[rgporter]

So if my wife is starting a new job when we get to VA, and she is, we can claim our moving expenses right?

 

[Mutterkuchen]

Originally posted by rgporter
So if my wife is starting a new job when we get to VA, and she is, we can claim our moving expenses right?

I'm claiming our moving expenses based on this argument. I hope that it is right. We meet the criteria listed above if we use my wife.

 

[twaspatz]

Absolutely you can (if your spouse is seeking a new job, though it must follow the "time test" and the "distance test" The time test dictates that the new job must be full-time, and the person must work at least 39 weeks out of the year following the move). The job can be either a new job, connection w/ current job, etc. (doesn't matter).
The second test (distance test), states that the new job must be at least 50 miles further than the communting distance to the old job. (i.e. if you or your spouse used to commute 5 miles to work, then the new job must be at least 55 miles from your old place of residence).
You can deduct moving expenses (travel & lodging) as well as 30 days of storage fees. I believe it is one trip per person max, though family members don't have to travel together.

Technically, if you're not married, you could move to your new residence and work full time for 10 months, then quit and start med school, however there's obviously not 10 months until school starts, so the short answer is:

If you're married and your spouse works full-time, you can deduct
If you're single, you're pretty much S.O.L.

See
http://www.irs.gov/pub/irs-fill/f3903.pdf
for further

 

[Amy B]

Originally posted by rgporter
So if my wife is starting a new job when we get to VA, and she is, we can claim our moving expenses right?

You can count it if it is for your wife's job. I am counting mine for my husband's job move which happens to be in the same city where my new school is. What a coincidence😉 😉