Grad Student Tax Lie #7: You can take a moving expenses deduction for your moving costs to grad school.

“Oh, you’re moving for grad school? You’re being paid to go to grad school – like a job? You should take a deduction for your moving expenses! I’ve done that whenever I’ve moved for a job.”

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The moving expenses deduction is a great one to be aware of, but you’ll probably only be able to apply it after grad school.

To be able to take the deduction, you have to pass three tests, one of which is the “time test.”

The time test states:

“If you are an employee, you must work full-time for at least 39 weeks during the first 12 months immediately following your arrival in the general area of your new job location.”

(If you are working a full-time job or are self-employed full-time in addition to your graduate work, perhaps you will be able to take the moving expenses deduction. The rest of this post assumes is intended for graduate students who are being paid stipends by their universities and who have little to no outside work.)

While you are absolutely working ‘full-time’ and then some on your graduate degree, you are almost certainly not considered a full-time employee. Graduate students with assistantships are student-employees, but the fine details of their contracts/offers reveal that they have only a 50% appointment or less. That means that the hours for an assistantship are capped at 20/week, which does not meet the eligibility requirements for the moving expenses deduction. Graduate students paid by fellowships are not employees at all, nor are they self-employed, so they also fail the time test.

See the tax lies home page for a full list of tax lies that graduate students should not fall for.

We at Grad Student Finances are not tax professionals, and none of the content in this section should be taken as advice for tax purposes.

One thought on “Grad Student Tax Lie #7: You can take a moving expenses deduction for your moving costs to grad school.”

  1. Emily,

    I really like your website(s) and the seminars you’ve given at Duke. I also admire the effort to which you go to understand the finer points of the law so that you can be a good citizen and an obedient and blameless ambassador for Christ (Rom. 13, I Peter 2). However, sometimes I think your loyalty to the letter of the law goes too far.

    I know what you’ve written above about the technical details of graduate student appointments is true, but I’ve never understood the rationale behind those numbers, and frankly, I think it’s ridiculous. Grad students in the biomedical sciences really have a 120-180% appointment, and if we’re not putting in at minimum 40 hrs/week for >48 weeks per year, we’re going to be out on our butts pretty fast. Most of us clearly have an employee-employer relationship with our mentors/PIs/advisors, and our paychecks and our positions at the university are truly contingent upon our performance, even though this reality is explicitly denied by the language in our offers of admission and appointment contracts.

    We are EMPLOYEEs. We have JOBs. And in the spirit of the law, virtually all of us qualify to deduct the cost of moving 100-3000 miles to start our jobs as scientists/scholars/whatever and move into the next chapter of our careers. Ditto for Tax Lie #6: our healthcare premiums are not subject to income tax because we’re employees receiving a pre-tax fringe benefit, and that benefit should be treated as it would be for any other employee. We should pay our taxes, yes, but nobody’s obligated to go out of their way to pay more taxes than they ought to.

    Jesus and Paul emphasized the difference between the letter of the law and the spirit (Rom 2:17-29; Mark 2:23-28; Luke 10:25-37; Matt 23:23).

    Keep up the good work! But don’t get tripped up by legalism.

    Best,

    Joel Finney
    Duke Immunology

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