You should consult with your personal tax advisor to see if you can deduct rental car costs as a moving expense on your income tax. In general, moving expenses are deductible if you are moving because of your job (either starting a new job or transferring to a new location in your existing job) and your new place of work is more than fifty miles farther from your old home than your old place of work was. You also must work full time for at least thirty nine weeks in the twelve months following your relocation. If you pass these tests, then moving expenses are deductible on your income tax return. Other costs involved in moving, such as travel looking for a new job or travel to your new city to look for a place to live, may also be deductible.
The cost of renting a truck to move your furniture and personal possessions would clearly be a deductible expense, but the question of how to handle rental car expenses is a little unclear. The IRS allows you to take a standard mileage deduction (24 cents per mile as of the 2009 tax year) for your travel involved in moving or for travel involved in obtaining medical care. The IRS publications do not go into much detail, though, on how to handle rental car expenses if you do not use your own car in moving. At the very least, you can use the standard mileage deduction for your rental car mileage, but it is unclear if you can choose instead to deduct the actual rental fees for your car incurred during moving.
