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While US Tax laws make it mandatory for US citizens living abroad to file income tax returns under US IRS, they also provide few deductions from the income which can help reduce your taxable income. One such deduction allowed under IRS Publication 521 is Moving Expenses Deduction. Under this provision, a US citizen is entitled for deductions incurred while moving back to US or moving from one US location to another.

If you were working abroad but are now permanently retired, you can claim moving expenses under deductions scheme. However, point to be noted here is that your former main job location and your former home, both must have been outside United States. You are considered permanently retired if you intend to declare yourself as permanently retired, even if you might return to full time work after some time. Following points may be considered in order to evaluate your intention to retire:

1. Age and health at the time of retirement
2. Average age of retirement in your profession
3. Receipt of retirement benefits
4. Lay off period between the retirement and taking up full time job again

You can also claim the moving expenses for deduction if you are the spouse or dependant of the deceased who was working abroad at the time of death. However, you must meet following five requirements

1. You must move to a home in United States
2. You must move within six months of the decedent’s death
3. You must move from the decedent’s former home
4. Decedent’s home must be outside United States
5. You were living in the decedent’s home

You will be considered to have initiated the movement to the United States when one of the three conditions are met

1. You have signed a contract to move your household items and personal belongings to your home in United States
2. You personal goods and belongings are on their way to your home in United States
3. You have left your former home for your home in United States

One exception to the above provision is that if you are a US citizen staying in United States, and retire and then move to a new location within United States, you cannot claim for the moving expenses deduction.