Deductible moving expenses for foreign moves

Moving to a foreign country can be a daunting and expensive undertaking. Many individuals are unaware that if the move to a foreign country is for employment the cost of the move may be deductible. The good news is that extra expenses are deductible when the move is foreign. In this case a “foreign move” is deductible when you move to start work where your tax home is outside of the United States.  A foreign moves include a move from the United States to a foreign country, a move from one foreign country to another foreign country, or a move within a foreign county. Moving back to the United States has a separate set of rules.
The biggest advantage is that a foreign move has a broader category of deductible moving expenses. For a foreign move, the deduction for moving household goods and personal effects from the old residence to the new residence is expanded to include expenses for both moving those goods and effects to and from storage, and storing those goods and effects for part or all of the period during which the new place of work continues to be the taxpayer’s principal place of work. In a domestic move any storage of goods either prior to shipping to the new location or on arrival are not deductible however in a foreign move they are.
It is important to note that any expenses attributed to income that is excluded under the Foreign Earned Income Exclusion will not be able to be deducted. It is important to understand that the devil is in the details in taxation and that the situation discussed may not meet your specific tax situation. Consult us, qualified expat tax specialists, to see if you can use the extra deductions at James@aitaxadvisers.com