Buying a new house or even finding a new apartment on its own is a process and when we finally sign the lease or survive the closing there is a great sense of relief and excitement. Unfortunately these feelings are often cut short when we have the sudden realization that “Great, now I have to move”. Whenever you move, it’s a huge undertaking. Whether you’re moving for a job, family or just for a change, re-locating comes with a fair amount of expenses that have nothing to do with the purchase of real estate. No one ever says “moving is a cinch” because, frankly, its not. It’s a pain. Packing your life in a box, loading it into vehicles, transferring it across town or even across the country and then re-establishing a home is exhausting, frustrating and sometimes costly. There are ways to scrimp and ways to splurge when you’re moving. Deciding which route you want to take is something to consider before any packing tape comes out.
Why Are You Moving
One of the most important things to consider is the reason for moving. If you are re-locating for work then it is a completely different scenario than moving for the sake of changing homes. If you are moving because of a job, then the first thing to do is find out if you meet the eligibility requirements for tax deductions and re-reimbursements. In order to qualify moving expense deductions and/or reimbursements a few specific criteria must be met:
Test for Distance
- Your new workplace has to be at least 50 miles further from your old home than your former job location was from your previous home.
- If you had no prior workplace, your new job location has to be at least 50 miles from your old house.
Test for Time
- If you are an employee, you have to work full-time for at least 39 weeks during the first year immediately following your move to the general area of your new job location.
- If you are self-employed, you must work full-time for at least 39 weeks during the first year and for a total of at least 78 weeks during the first 2 years immediately following your arrival in the vicinity of your new work location.
- There are, of course, exceptions to the time test in the event of death, disability or involuntary separation, among other things.
If you pass both the time and distance “tests” for deductions you can literally apply most expenses associated with moving. You can deduct the cost of crating, packing, transporting, shipping and even storing your household goods.
Because you can deduct so many expenses associated with moving for work, this is the first thing to square away. Knowing you can deduct all of your expenses may encourage you to spend a little more money than you would otherwise. Hiring long distance movers, buying packing supplies, renting trucks or shipping decisions can be easier expenses to swallow when you know that you’ll be covered for it come tax time. If your move is job related, find out if you will qualify for these tax benefits, because if you do, it may change how you proceed.
Not Moving For Work?
If you’re move isn’t motivated by your occupation, or if you don’t meet the time and distance tests for re-reimbursements, it is a totally different ball game. The costs you incur for moving will fall entirely on you. Here is a short list of possible costs associated with moving:
Packing Materials – Boxes, tape and packing peanuts or bubble wrap. Before you go out and buy these kinds of things make sure you ask friends, family and even local business if they have extra boxes or box stuffing. You may be able to get enough boxes this way that you won’t have to purchase any. For protecting your breakables you can easily use old newspaper, wrapping paper, clothing or other textiles to wrap delicate items. You can certainly buy these things, but in most cases this is an avoidable expense.
Transportation –If you don’t have a small wagon train of mini vans or SUVs you may have to put down some cash on a truck. Rental trucks like Ryder and UHaul are available in most parts of the country but require you to load everything yourself. If that’s not a problem this can be substantially cheaper than hiring a full-service moving company with their own people and trucks.
Movers – Not everybody hires moves. If you have strong, willing friends who are able to try to lift your 4 bookcases, 2 love seats and 42’ TV you may not have to bring in professionals. But if you don’t have friends who will work for pizza, then you may have to hire people. Many moving companies charge by item, in these cases pack and load everything that you possibly can on your own and only pay people to haul the really heavy stuff.
Cleaning – Leaving your old house clean or moving into a clean space is important to many people. If the old place is a rental, the state you leave it in can determine if or how much of your deposit you get back. If the new place is a mess it means extra work before moving in. This is an area that most people consider DIY; a little time, effort and elbow grease will get the job done. But if you manage to save cash in other areas of moving, then you may consider splurging on some professional help here.
Meals – If you aren’t moving far you may not have to worry too much beyond feeding your friends who helped you move. But if you have a ways to go, food needs to go in the budget.
Storage – If everything you own isn’t going to fit into the new place, then storage may be another cost consideration. Look around at different storage companies for good rates and it may be smart to find a storage facility closer to your new home than your old one, so that you can easily gain access to the stuff that wouldn’t fit into your new house.
There can be any number of costs associated with moving. Some of them are mandatory while others are elective. The first thing to do is to create a budget and figure out what your priorities are. If you are moving for work then you may have a little more elbow room knowing that you can deduct much of what you spend. If you are on your own, you’ll be tempted to cut as many corners as possible, but remember that moving is always stressful. In some cases it may be worth it to spend the money to make your life easier.