[skibumwa]

If you are a US citizen going through great expenses traveling to NZ for interviews, paying PR fees, flights to/from NZ and will be spending a crapload of $$$ to move there for a job, PLEASE remember that the IRS considers "job search expenses" and "relocation expenses for a new job" as tax write offs.

For us international NZ job seekers, this is a huge write off for our Federal Income Taxes. So fear not, just document everything well and save your receipts for EVERYTHING!!!! I am actually looking forward to next tax season - April 15th!! Bring on the massive tax refund Mr. Uncle Sam!!!

Here are some worthwhile IRS Webpages to start from:

IRS - International Moving Expenses (http://www.irs.gov/businesses/small/international/article/0,,id=97167,00.html)
IRS - More detailed info on international moving expenses (http://www.irs.gov/publications/p521/ar02.html#d0e1348)

IRS - Job Search Expenses (http://www.irs.gov/publications/p529/ar02.html#d0e999)

Best of luck everyone...

John

[johnandbethcox]

This is my favorite tax requirement!

Do you know whether you put all expenses in the year they occurred or in the year you move?

So, for example, suppose you pay the PR processing fees in 2006 and make the final move in 2007. Do you split the expenses between the years or can you put them all in 2007?

[barryp]

Cash basis - there's no 'split'. You deduct the fees in the tax year you paid them.

It's not at all certain that PR processing fees or associated medicals are included in allowable deductions. I just reread Form 521 and it's pretty clear to me that they are not, though I Am Not A Tax Professional. Also unclear is deductibility of moving pets, a considerable expense but the IRS does not consider them to be family members! ('Household effects' doesn't quite describe them either.)

I suggest reading Form 521 completely, so you make sure you comply with all conditions. The only one nobody has to worry about with a move to NZ is the distance test!

Nevertheless, a great tip - flights, hotels (not meals!) and container shipping expenses are hefty, and these tax breaks could save thousands.

[skibumwa]

I use www.TurboTax.com for my annual IRS taxes. The laws are all built in. You just follow the questions, use your receipts and nothing can really go wrong unless you enter in wrong numbers that don't match your receipts. I will never try to understand the US Tax system. Eesh no way! :laugh

Oh and you can write off your hotel/lodging stay when you arrive in your new home while you are actively looking for a perm home/house/flat. It's allowed! For your interview expenses (flight, lodging, dining, etc) everything is a write off if your primary reason for going to NZ was to interview for new work.

Yes indeed, this tip can get you back thousands of $ on your tax returns! Pass the word around if you can.

This is great. You LEAVE the USA for a better home/life (NZ) and get a tax write off/break for the costs of interviewing down there & the move itself. Hehe...! :raebanana (it's a WIN - WIN for us migrants!)

-John


I just reread Form 521 and it's pretty clear to me that they are not, though I Am Not A Tax Professional. Also unclear is deductibility of moving pets, a considerable expense but the IRS does not consider them to be family members! ('Household effects' doesn't quite describe them either.)

I suggest reading Form 521 completely, so you make sure you comply with all conditions. The only one nobody has to worry about with a move to NZ is the distance test!

Nevertheless, a great tip - flights, hotels (not meals!) and container shipping expenses are hefty, and these tax breaks could save thousands.

[barryp]

This topic's been quiet for awhile, and since I spent all of today wading through our 2007 IRS forms, I thought I'd share some bad news.

IF you deduct moving expenses when moving to another country THEN you will automatically lose the ability to use the Foreign Income Exclusion (Form 2555) the year you claim that moving expense deduction. See the instructions for Form 2555, under Part VIII (page 4). As a result, NZ income will be taxed twice, and at the very best you will have to jump through other hoops to less effectively shield income.

The instructions for Form 521 are unclear on this point, but in short that form (and TurboTax, Quicken, et al. that use it) does not apply to moves into or out of the USA. See Publication 54.

You really, really, really want to qualify for the Foreign Income Exclusion if you move to NZ as a US Citizen earning your living in NZ. The first US$85,700 of each citizen's foreign-earned income is shielded from US Federal income tax. (State tax liability is of course not automatically the same.) I am saying a little prayer of thanks to all deities that we arrived in NZ on New Year's Day 2007, making our qualification for the exclusion simple and easily-proven.

I don't know about job-hunting expenses or NZ PR expenses, which may well still be deductible from your Form 1040 (itemised) for that tax year.

All relocating or potentially-relocating Yanks should get ahold of IRS Publication 54 straight away. If you're smart you'll then hire a professional, ideally before you move, to make sure you have no nasty tax surprises. If you're like me, you'll read the actual NZ/US tax treaty, burn an entire day digesting IRS forms, and finally wish you had paid someone else to do the work.... :wah

Maybe this can be a career change for me! Or, maybe not... :no

[Susan&Dennis]

Thanks to all for some encouraging information (and I do realize that I need to verify details for myself). This is a useful and reassuring thread for those of us who feel that we are hemorrhaging money in our efforts to move to NZ.

Susan

[BkyMonster]

IF you deduct moving expenses when moving to another country THEN you will automatically lose the ability to use the Foreign Income Exclusion (Form 2555) the year you claim that moving expense deduction.

figures :laugh

[swissmissdesigner]

I just started to working on my tax sheets... GRRRRRRRRRRRR