Is the cost of "breaking a lease" consider a "moving cost"?
Question:
My boyfriend is moving from Boston to NYC because he lost his job. He has to break his lease in Bston to do it. The landlord is charging him one month's rent. Is this considerd a "cost of moving" therefore it is tax deductable? He is looking for a job in NYC, Hypothetically, if he NEVER finds one, is the cost still deductable as a cost of "finding a new job". I guess the question is is the deduction for the costs of "finding a new job" or "searching for a new job"
Answer:
No. It used to be, but no longer. Only the direct costs of the move are now allowed as moving expenses. The good news is that moving expenses are now an adjustment to income, rather than a deduction. That means you don't have to itemize to get the benefit. See Publication 521. The good news is that it's job "search". The expenses are deductible even if he doesn't find a job (but then he won't have any income either). The bad news is that this is one of the miscellaneous itemized expenses subject to 2% of your AGI. So unless he itemizes deductions and the job search costs are over 2% of his income, they won't do him any good. See Publication 529.
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