Can I retroactively claim deductions for an international, job-related move?

The time frame within which a taxpayer can file an amended return to claim moving-related deductions is three years (or two years from the date of actually paying the tax in question, whichever is later).

Question

I am a U.S. citizen and moved back to the United States just over two years ago after spending a few years abroad. I've been self-employed my whole professional life. My work abroad was as a contractor in the technology sector. I quit that job and decided I wanted to do private foreign language tutoring in the States. It’s basically a full-time job. I only recently became aware that a bunch of expenses for an international move can normally be deducted -- did I miss that boat by not claiming them on the first tax return I filed after getting back to the United States? Also, is it of any consequence in terms of qualifying for the deductions that I changed sectors entirely once I got to the United States?

Answer

Welcome home! (Admittedly a slightly belated welcome.)

Let’s start with your general eligibility for the deductions one can normally take when they move for work purposes, then address the issue of claiming them retroactively.

Reasonable moving expenses can be deducted if you satisfy the (i) “closely related,” (ii) “distance” and (iii) “time” tests. For details on all three, and for information as to what kind of expenses are normally considered “reasonable” in this context, see the article “Moving to the U.S. for Work? Tax Deductions Not to Miss.”

The only test that appears to be at issue in your case is the “time test,” which requires that a self-employed person such as yourself work full time for a minimum of 39 weeks during the first year after the move, and for at least 78 weeks during the two-year period after the move.

In counting up those weeks, use only weeks during which you worked “full time.” “Full time,” for purposes of these deductions, is judged by what’s “usual for the type of work in your area.” So if you work about as many hours during a given week as most full-time, self-employed private language tutors in your city (or broader region if you’re not near a decent-sized city), you can count that week toward the 39 and 78 week requirements.

It doesn't matter that you’re now working in a different industry than you were while living abroad -- this doesn’t keep someone from qualifying for the moving-related deductions.

You’re in luck - the time frame within which a person can file an amended tax return to claim moving-related deductions is three years (or two years from the date of actually paying the tax in question, whichever is later).

As long as you ultimately did satisfy the time test, as discussed above, and meet the other requirements, since the first tax return on which you could have rightly claimed the deductions was filed less than three years ago you should be able to use Form 1040X to amend the first tax return you filed upon moving to the U.S. to claim deductions for the eligible moving costs.

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