Although the weather is still warm as fall approaches, change is in the air. In just a few short months, the holiday season will be in full swing with family gatherings just about every weekend. Before it comes to that, you may find your career is also ready for a change.
Job changes are nothing new. According to a 2014 study from the U.S. Bureau of Labor Statistics, employees spend approximately 4.6 years at their current job before moving on to a new opportunity. The figure takes into account all workers, and an early 2015 survey from Monster found 78 percent of workers would relocate for their dream.
Relocation may entail an employee moving closer to a new workplace that is still in the same city or moving to a new state. If you find yourself itching to switch jobs and hoping to move before winter takes over, you have to financially prepare for relocation.
Start with research
After countless hours spent sifting through online job postings, you've found a handful you believe to be a perfect fit for your skill set. Before applying, conduct detailed research, with an emphasis around housing costs for buying or renting property. You wouldn't want to accept a job and find out there are no available apartments for rent, after all. The cost of living is another area to take into consideration.
Bankrate offers a cost of living comparison calculator and the differences are startling in some instances. Take advantage of this tool. For example, a $50,000 salary in Los Angeles is vastly different than the same salary in Kansas City, Missouri. The average cost to rent a one-bedroom apartment in Los Angeles is around $2,380 per month, whereas similar rent in Kansas City is approximately $830 a month.
Cost of living comparisons can help you narrow down your career options. A new job may seem enticing, but you have to decide if higher living costs are worth the same - or sometimes a lower - salary.
Create a budget
According to Intuit Quicken, a relocation plan can't be completed without creating a budget. Include every expense you'll need, such as costs to hire a moving company, shipping totals and even application fees if you're thinking about renting. Your budget will also be influenced if your new job offers a relocation package. According to the 2012 Allied Workforce Mobility Survey, companies small and large may offer employees a stipend to help them cover the cost of moving. This money can even be used to for temporary housing and storage costs.
Don't be afraid to negotiate relocation packages, especially if you're moving across a few states. As Moveline stated, you'll never know if the new company will help you move if you don't ask.
Trying to find the right house or apartment in a new city can be a tricky adventure. Unless you left your previous job early and have the time to spare, in-person viewing may not be possible, or only scheduled on weekends.
"You can even get a tax credit for moving."
Thankfully, online real estate services will become your best friend, as sellers and leasing companies upload a plethora of photographs online. However, be sure to emphasize with your real estate agent or landlord that you'll be moving from out-of-state. Remember, your budget should have also accounted for living costs. Just because you have a new job doesn't mean you can live outside your means.
Get those tax breaks
Perhaps one of the best benefits from moving - aside from the new job and location - is a potential tax break from the IRS. Known as Topic 455, this IRS regulation allows workers to claim moving expenses as a tax credit, provided they meet the following requirements:
- You meet the time and distance tests
- Your move occurs close to the start of the new job
The organization has also provided guidelines to help you determine if you meet the requirements. To meet the time requirement, you must work 39 weeks, full-time, during the first year after relocating. As long as you report the move in the subsequent year, it will qualify as having been closely related to the start of a new job.
The distance equation will require some quick math to be completed. Essentially, the IRS mandates your new job "must be at least 50 miles farther from your old home than your old job location was from your old home." Once you meet the three requirements, you will fill out Form 3903 and deduct the claim as an adjustment on your U.S. Individual Income Tax Return form.
Relocating for any job will provide many new opportunities. Before making the leap to a new state, create a budget, ask your new job if they offer moving expenses and after one year, you can even get a tax credit.
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