Tax Relief for Expenses of Employment - A Comprehensive Guide

Employees who need to relocate due to work can avail of tax relief for expenses of employment. What do they need to do? They simply need to indicate the expenses in their income tax returns when they file at the end of the taxable year. If the IRS accepts the expenses as work-related, then they are granted the tax relief mentioned. However, this tax relief cannot be claimed easily are there are several rules set by the IRS.

Employees who need to relocate due to work can avail of tax relief for expenses of employment. What do they need to do? They simply need to indicate the expenses in their income tax returns when they file at the end of the taxable year. If the IRS accepts the expenses as work-related, then they are granted the tax relief mentioned. However, this tax relief cannot be claimed easily are there are several rules set by the IRS.

Number two: The distance of the move from one place to another place should be within the parameters set by the IRS. For individuals to qualify for tax relief for expenses of employment, the new workplace and the former place of residence should be at least 50 miles more distant than the old workplace and the former residence. What this means if a person used to travel 4 miles to work in his former workplace, he should travel 50 miles more from his home to the new work place to qualify for the tax break. This means that he should travel 54 miles to the new workplace in order to have the expenses deducted from his income tax.

Number three: The individual applying for tax relief for expenses of employment should work in the new area for a minimum of 39 weeks during the year of relocation. It does not necessarily mean that the 39 weeks spent working in the new location should be spent in the same company or the work must be continuous. As long as the number of weeks adds up to 39, tax relief may be granted. Of course, the 39 weeks are inclusive of absences due to illness, natural calamities, strikes that are related to work, and other valid reason. For self-employed individuals, they must have spent 39 weeks working full-time within the first year of relocation and 78 weeks within the first two years of relocation.
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Any employee, businessman, or self-employed individual can avail of tax relief for expenses of employment if he passes all the criteria set to receive the benefit. They must not take this tax relief for granted as the expenses they incur can be deducted from their taxes. This equates to savings on their part. All they have to do is specify the expenses in the tax return and they can enjoy the tax deductions when the IRS approves the claim.