moving expenses tax deduction

Are Moving Expenses Tax Deductible? Yes, In These Specific Cases:

Can you deduct the cost of moving? Make no mistakes, moving is seriously costly and time-consuming. If you have to moved this tax year, you may well wonder if you can deduct your expenses from your tax return.

The good news is that if your move was directly related to your job, you can deduct your moving expenses on your taxes right on line 26 of your long Form 1040. You don’t even have to itemize your expenses.

irs moving_expenses 1040

Here’s what else you need to know:

Which moving expenses are deductible?

Of course, only certain types of moving expenses are actually tax deductible. It’s well worth learning about your rights before you do anything else.

Expenses are only deductible if you move for work. This may include move for a brand new job in a different area, or if your current company moves to a new location.

If your employer asks you to take classes or online learning courses, these are tax-deductible as well.

If you are considering writing-off moving expenses, you will be asked a number of questions by your tax professional or when filing with software like TurboTax or H&R Block.

Here are some requirements that you should know about:

can you deduct moving expenses

Requirement #1: The distance of your move

Of course, it’s not as easy as just moving and then making a claim. There are actually a fair few restrictions and requirements that apply when it comes to deducting moving expenses. The first thing you need to consider is the distance of your move.

To qualify for any reductions, you should ensure that the distance between your new place of work and your home is 50 miles farther than the distance of your old place of work and your home. If you used to commute 10 miles for work, for example, the new distance will need to be 60+ miles.

Requirement #2: Your number of working hours

The second, important thing that you really need to take into consideration is your working hours. According to the guidelines, you will need to be working full-time for the first 39 weeks after your move.

While the IRS doesn’t have specific guidelines on what it means by “full-time” work, but Healthcare.gov recently defined “full-time” as 30+ hours per week, which seems to be a good benchmark.

Military moving expenses

If you are in the military or Armed Services on active duty, you don’t need to meet these two requirements. If you move because of a change of station, you can deduct your unreimbursed moving expenses on form 3903.

You can also file your taxes for free or at a discount with a military discount from brands like TurboTax.

What about a move for retirement? 

If you’re retired or no longer working for medical reasons, your moving expenses are generally not tax deductible.

However, this would be a great time to donate unwanted furniture, household items, and clothing to the Salvation Army for a sweet little deduction!

cost moving tax deduction

What expenses are actually covered?

Once you’ve established that you are most likely qualified for the moving tax deductions, you should check out what is actually covered.

The very last thing that you want is to end up claiming for the wrong things and facing an IRS red flag or penalty for your actions. Instead, it’s better and smarter to educate yourself ahead of time. Here are the expenses that are covered:

  • Transport of your personal effects: For example, if you hire a mover to help you take your personal items and home furnishings across the country, you need to keep a record of the cost. The likelihood is that you will be able to make a claim for this fee.
  • Storage: If for some reason you are unable to move your personal things immediately, you may find that the best way forward is to store them somewhere. Paying for a storage unit can be rather costly, to say the least. Luckily, you can make a claim for the storage unit fee which includes up to 30 day of use.
  • Travel costs: Of course, one of the most obvious things for which you can make a claim is your own personal travel costs. You may have to fly across the country or, indeed, take a train. You should keep hold of your tickets and proof of purchase should this be the case.
  • Vehicle costs: If you opt to drive to your new home rather than using commercial transport, you can still make a claim. You will need to work out the cost of the journey using the standard mileage rate before you get any deductions. Remember, you will also need proof of these fees.

How to claim these expenses as a deduction

Now, let’s talk about how you deduct moving expenses from your annual taxes. There are a few rules that you should follow when making your claim. Here’s what you need to know:

  • Claim expenses for the year you move: You can claim the tax deductions in the very same year that you move. (Please note that the likelihood is that you won’t officially ‘meet’ the requirements of the deduction until the following tax year. However, you are able to make the claim in advance on your current yearly forms.)
  • You will need the IRS Form 3903: To actually make the claim and deduct moving expenses from your annual taxes, you will need to get the IRS Form 3903. You can fill out this document and attach it to the rest of your tax forms before you send them off to be processed.

So, in conclusion, job-related moving expenses are tax deductible, and you don’t even have to itemize them. However, if you don’t meet the requirements to deduct your moving expenses, don’t try to write them off, or the IRS might move-in on you!

Moving van photo credit: Alden Jewell – Flickr

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