Deductions and Reimbursements for International Moving Expenses

Reading Time: 3 minutes

Deductions on Moving Expenses and Reimbursements

As a US citizen or resident alien moving to a new primary work place outside the US and its possessions, you may file for deductions related to your moving expenses. These expenses may be ones you paid for yourself or the amount reimbursed by your employer. Deductions must be claimed for moving expenses which are reasonable and necessary to the shift in workplace. Aside from these criteria, you must also pass the Time and Distance tests. Let us look at these tests in more detail.

Time Test                                             

In order to establish the relevancy of your move to your work, the Time Test requires:

  • An employee to work in the new full-time job for at least 39 weeks within 12 months of moving.
  • A self-employed person at least 39 weeks within the first 12 months and 78 weeks within 24 months of the move.

You can be exempted from this test for reasons such as end of work due to a disability, layoffs or if you were transferred for the employer’s requirement.

Distance Test

Your new primary workplace must be 50 miles away from your former home than your old primary workplace.

For example, if your old office was 10 miles away from your old home, your new office would now have to be at least 60 miles away from your old home in order for you to qualify for moving expense related deductions.

If this workplace is your first, it must be 50 miles away from your old residence. The distance between both points is calculated by considering only the shortest or commonly used routes.

Note: Members of the Armed Forces are NOT required to meet both tests if their work relocation is their final i.e., they relocate within 1 year of their retirement to their new primary work place.


As an employee if your moving expenses are reimbursed by your employer, how you report this expense depends on the type of reimbursement namely, accountable and non-accountable.


If your deductible expenses are:

  • connected to your business i.e., these expenses were incurred while carrying out a business-related service for your employer.
  • accounted for and presented to your employer in fair time
  • only incurred expense and does NOT include unexpected excess reimbursement. This excess amount must be returned within fair time.

– If these criteria are met, employer should include reimbursement in Box-12 and not in Box-1 of Form W2 (Wage and Tax Statement) under code P.


If the reimbursement:

  • does not meet the accountable plan criteria
  • Is non-deductible
  • is an excess reimbursement that is not returned to the employer in fair time is considered an unaccountable reimbursement.

-An example of this would be moving expenses paid for by reduction of your pay by the employer. A reimbursement in this case would be the reduced amount which is part of your income. Given this, your employer must include the amount in Box-1 of Form W2, withholding income, Medicare and social security taxes.


  • Deductibles can be claimed on moving expenses during the year your employer reimburses as supposed to the year the moving expenses were actually paid by you.
  • If move is made to a foreign tax home, reimbursement is considered as wage for future services. It is taxable for the year the move is made if you pass either the bona fide residence or physical presence test. If not, the reimbursement amount for the current year is:

Total reimbursement * (No. of qualifying days / total No. of days in the year)

Moving Expense Deductions When Filing Form 2555

There are some moving expenses reported that may overlap with those reported under Form 2555 if you are filing for Foreign Earned Income Exclusion (FEIE). In such cases, the overlapping amount must be reported under FEIE with a mention that it is NOT a deductible moving expense. They are separately allocable.

Filing for the Deductions

Moving expense deductions can be reported using Form 3903-F. Each move requires a separate Form 3903-F. These must be filed with Form 1040 where the moving expenses can be deducted.

For more details refer IRS Publication 521

Also read Foreign Earned Income Exclusion Vs Foreign Tax Credit and Trucker Tax – Owner Operator Tax Deductions

To get Accounting and Bookkeeping Services, you can Contact us.

Sign Up For Our Weekly Newsletter
Based on 107 reviews
powered by Google
Annie Phillips
Annie Phillips
12:35 10 Oct 21
Turn around time was amazing on the project I needed done. When you don’t understand all the different forms... communication is key and you will get that here. They are there to explain what and why you need more
Meru Kapadia
Meru Kapadia
23:33 01 Oct 21
I usually don't write reviews much as everyone has different experiences, but definitely wanted to share the positive... experience I have had here and why I would recommend them to all my family, friends and co-workers.I got a referral for here from a friend, so thought of giving them a try over my old CPA firm. I have been going here for a couple years now and have to say they are top notch. They are always responsive and willing to work with me even when I am delayed. I generally like to ask a lot of questions and not once did I feel like they were annoyed by it and would very thoroughly and positively answer all my concerns with detail explanations. Even during the pandemic, they worked with me 100% virtual and it was seamless. Overall, I am very happy with this firm and will continue with them for the foreseeable more
Kevan Shah
Kevan Shah
21:45 01 Oct 21
I’ve been going to them for 3 years now for multiple of my businesses. I changed to them after I had problems with my... previous CPA firm and I’m so glad I did! Best decision I ever made for my businesses. They have saved me thousands of dollars over the years as well as deal with my immensely complicated tax filling issues. No matter when I call, they always help answer all my questions (and trust me I have a lot) and put my mind at ease on all my concerns. I feel as if I am family the way they take care of me. The quality of their work has not changed; very consistent and professional. It is an understatement when I say I highly recommend more
Maunil Shah
Maunil Shah
16:19 01 Oct 21
AKIF CPA is the best place for your tax needs! Saim has been easily available for my all my questions and concerns. ... Couldn’t ask for a better firm that provides excellent service and a familiarity with their clients. I always recommend family and friends to AKIF CPA!!read more
Shah Hussain
Shah Hussain
03:58 01 Oct 21
Hello AKIF CPA,I wanted to share my experience with you, your team and whomever may be reading this message. My most... humble thanks to you and your team for a being such great part of my success.You have done a fabulous job for us this year, and since you took over our books (during our most devastating times) you have literally taken weight off of our shoulders.Thanks for bringing everything up to date and also providing us with numbers or as you call it consultations, ahead of time so we could seal the holes.Great work!!!Shah more
Sumit Dalwadi
Sumit Dalwadi
04:57 30 Sep 21
The professionals at Akif have been absolutely amazing! Quick to answer all the questions I had and always available... to offer their more
Calvin R
Calvin R
20:21 29 Sep 21
I recommend these guys! I will be going back next year. They made everything simple and we understood what was... happening. There we issues with our taxes due to our previous accountant and these guys fixed everything. They answered our questions and service was always with a more
Ammoria Daniels
Ammoria Daniels
02:11 16 Sep 21
We contacted Akif with an urgent matter regarding corporate taxes. Akif immediately understood what was needed and... within days had everything ready to sign. The level of service we received was amazing and unmatched. Waqar expertise in trucking industry made our situation seamless. His communication was outstanding; I heard from him daily and could have been completed sooner if I was as fast as he was 😃 Highly recommended!read more
Joe Paneitz
Joe Paneitz
18:30 18 Aug 21
What an absolute pleasure to work with this CPA firm. My business is already seeing such a positive impact and growth.... I cannot believe I didn't connect with them sooner. This firm is helping in so many ways! 5 stars is an understatement! Thank you so much for your help AKIF CPAread more
Helptest ARCpoint Labs
Helptest ARCpoint Labs
15:02 18 Aug 21
The firm is quick, responsive, and has the latest technological software. Thus far, I have been with them for 3+ years... and will continue to work with them even after relocating. They make it easy even when I'm miles away. Would highly recommend more
Luz Tipaz
Luz Tipaz
16:06 13 Jul 21
Saim and his team are the best CPAs in town. I have been their client for years. All started when I needed help with... company structure with multiple companies and then accounting and Taxes. I have been very happy ever since. Thank you AKIF more
Maria perez
Maria perez
18:31 08 Jun 21
Me and my husband have been getting all of our personal Taxes, business Taxes, monthly bookkeeping, accounting and... payroll done with AKIF CPA. Recently, we had more stuff come up and had detailed analysis done on capital gains, single family rentals (SFR) and business disposition. You will only know how great this CPA company is until you have worked with them and given them a chance. Words can’t describe our experience. AKIF CPA gets the job done every time - very reliable, professional and more
Afnaan Amin
Afnaan Amin
22:14 02 Jun 21
Very good experience, we had unique situation in regards to cross border income as Canadians currently residing in the... US. Income on both sides of the border through completely different channels. Everything was very easy and completed timely, I also had lots of random questions and Mohammad provided top notch service along the way and even after we finished our taxes!! Highly more
Ryan Paton
Ryan Paton
10:56 08 May 21
I moved to the USA from Canada late 2018 as part of a promotion/relocation for work. For my 2019 returns, I used an... accounting firm recommended by the local Canadian social club in my city, which was a terrible experience. They were slow to respond to inquiries and would follow up in piecemeal requests which dragged out my return process over several months, often asking for information I had already provided.For the price I paid, I vowed to find better service. I found Mohammad online and decided to reach out. Mohammad was extremely responsive, took care of my US and Canadian returns as well as my wife's business returns in a timely manner. Overall, it was a very positive experience and I would recommend him to another in my more
Tuan Vo
Tuan Vo
01:59 20 Apr 21
I relocated to Texas from Alberta, Canada and needed a CPA to help me with my cross-border taxes as I was not happy... with the CPA that I used previously. During my interviewing process to find another CPA, I had good feedback from Mohammad as he was able to answer my questions regarding my unique tax situation with expertise, and importantly to me, in a timely manner. I decided to use his services for the current tax year and I have nothing but compliments for the work Mohammad provided. If you are in need of a professional cross-border CPA, I highly recommend reaching out to Mohammad more
See All Reviews

Crypto Tax & Accounting Newsletter Signup


Cross-Border Tax Newsletter Signup