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Figuring Amount of Tax Deduction

How much of the moving expenses can I deduct?

If your employer does not reimburse you for your moving expenses, deduct all allowable expenses. If your employer reimburses you under a nonaccountable plan, your reimbursement will be included in box 1 of your W-2. In this case, you can also deduct all allowable expenses.

How reimbursements affect my tax deduction for moving expenses?

A reimbursement you receive under an accountable plan is excluded from the income reported in box 1 of your W-2, so you are not taxed on it. You can deduct only those expenses that are in excess of the reimbursement amount.

If your expenses are less than the excluded amount, you must report the difference as income on line 7 of the Form 1040. Normally, the amount that has been excluded from your income is shown in box 12 of Form W-2 with the code letter P.

What tax form to use to claim moving expense tax deductions?

You use the Form 3903, Moving Expenses, to figure and report your moving expenses. Enter the total of all your deductible expenses, except travel and lodging expenses, on line 1 of form 3903. Then add your deductible travel expenses and subtract any reimbursement you received from your employer that was not included in your wages in box 1 of your W-2. Enter the result on line 26 of Form 1040. Attach Form 3903 to your 1040 form.

Figuring Amount of Tax Deduction



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