Your client who lives in San Francisco, CA is taking a new position with her cur

Question

Your client who lives in San Francisco, CA is taking a new position with her current employer that is located in Detroit, Michigan. The company has given the client the option of taking $10,000 to facilitate her move or she can pay the moving expenses up front and then submit her moving expenses for reimbursement. What should she consider from an income tax perspective in making her choice? The client makes her move and chooses the $10,000 cash option. She hits the highway after her last day in the San Francisco office to head to Detroit and start in her new office on November 1, 2014. She is not taking any time off between roles. You are engaged to prepare her 2014 income tax return. What do you need to do relating to moving expenses?

Bad news, by January 15, 2015 and after 18 straight days of snow, your client knows this has been an incredibly bad mistake! She quits her job completely and moves back to her Mom’s in Los Angeles to get her head together. After 10 months on her mom’s couch (i.e. unemployed) she takes a job as a yoga instructor. She comes to you to prepare her 2015 tax return. How do you advise her?

Explanation / Answer

Ans)

According to the law, in order to get moving expenses as deduction , if a person is self employed person,then he has to work full time for atleast 39 weeks out of last 12months and atleast 78 weeks during 24 months . If a person is employed , then he has to work for 39 weeks full time during last 12 months.

Since in the given case , client is a employee she has to work for atleast 39 weeks during last 12 months with the employer.

Thus in the given case since in the year 2014, she has worked for more than 39 weeks full time with her employer she was eligible for moving expenses to claim them as deduction.

but in the year 2015 she has not worked for 39 weeks as she left the new job and was unemployed for last 10 months , so in the year 2015 she is not eligible to claim moving expenses as she has not worked for 39 weeks .

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