Q: Can I deduct my moving expenses if I moved from overseas for a job, but haven't worked for a US company abroad?
Hi, I'm an American citizen who lived abroad for two years. Last year, I moved back because of a better job opportunity, but I'm not sure if I can deduct my moving expenses. I keep reading if expenses occurred 'related' to the income. What does it mean? The company I worked for overseas wasn't an American company, and I did not pay taxes on that income. Does that mean I can't deduct, because I didn't pay taxes on the money I spent? What if I paid for those expenses with a credit card and paid it back with the money I earned here in the US?
A:
For 2017 taxes, you can deduct your moving expenses if you returned to the US to start a new job or to work at a new location for your prior employer. You can find more information about this on the IRS webpage for moving expenses (IRS Publication 521): https://www.irs.gov/publications/p521
However, you should have declared your income from your foreign work on your US tax return. As a US citizen, you are required to declare your worldwide income on your US tax return. There are also special reporting forms if you had foreign bank or investment accounts with a total combined balance of more than $10,000 at any time during a year and/or if you had foreign retirement accounts. When you are living and working abroad, there are some special provisions that would allow you to exclude your foreign-earned income from being subject to US taxes (if you qualify for those exclusions), but you do still need to declare the income on your return.
I recommend talking to an experienced accountant about preparing your tax return for 2017 and reviewing your prior year returns to make sure you are declaring your income and expenses properly. You should look for someone with experience dealing with foreign income and assets.
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