What moving expenses are tax deductible?
When it comes to moving, there are a lot of things to think about. Scheduling a mover, hiring a cleaner, and what to do with that old sleeper sofa that hasn’t been comfortable for a decade. For the most part, many of us don’t think about tax exemptions or deductions for moving, especially if it’s just across town.
Believe it or not, many moving expenses were tax-deductible prior to 2018 and could be claimed on your IRS Form 1040. However, many of those deductions were dropped by the federal government as part of the Tax Cuts and Jobs Act, enacted in 2018.
If you are currently an active member of the United States armed forces, you and members of your household are still eligible for the tax deduction. If you are moving due to a permanent change of station or as part of a military order, be sure to fill out a form 3903 for the 2019 tax year.
The list of expenses that can be claimed on a federal tax return can only include reasonable costs associated with a move. This means refilling the gas tank (mileage rate is 20 cents per mile), changing the oil, or even a stay in a hotel for longer trips. Parking fees or tolls are also included, but not stopping somewhere for lunch.
Other deductions may include moving services, rental trucks, and even short-term storage. However, storage costs are only covered for the first 30 days after your move. So make sure you get everything into your home during that first month at the new residence.
There is a caveat, though. You can’t claim expenses that were provided by the government. For example, if the government paid for a moving company, you can’t turn around and claim that on your taxes as well. Any costs associated with the home (mortgage, improvements) or keeping your car legal (tabs, insurance) are not covered.
In the past, moving expense deductions were allowed in cases of moving to a new town or state for a new job. However, only certain costs were allowed. There were two tests that needed to be passed before qualifying: the location test and the time test.
This one involves a little math. To deduct the cost of moving, your new job location needs to be at least 50 miles further than the distance of your old home to your old job location. So, if you lived 10 miles away from the old job, your new home would need to be at least 60 miles away from your old job.
To qualify, the move has to coincide with the start of your new employment. This means you would have had to work full-time for at least 39 weeks within the first 12 months after moving. If you are self-employed, such as a construction contractor, you would need to work 78 weeks in the first 24 months.
There was one exception: if you moved by yourself to the new location while your family stayed behind, you could take the deduction after they moved. If a family member needed to stay behind to finish medical treatment or to finish the school year, you could claim moving costs even though the “move” happened after you started the new job.
For a complete rundown on what’s allowed, and what isn’t, please consult the IRS page on moving expenses for active armed forces personnel. It’s a short document that is full of useful information. This way you won’t be surprised when certain expenses aren’t allowed.
Time To Move?
Active military or not, moving is a stressful time. Why not let Smooth Move People handle the heavy lifting? Whether it’s a residential or commercial move, our crews will provide efficient, safe, and professional packing, loading, and unloading services. We also provide packing supplies and other accessories.
Smooth Move People have more than 30 years of experience in the moving industry. Starting with one truck and a dream, we have slowly increased our fleet of trucks, service areas, and employees. With careful planning, we are able to own outright our infrastructure.
This means we are able to offer the lowest prices in town – and the entire state! Because our overhead is so low, there are no extra costs to pass on to our customers. In fact, we’d go even lower if we could, but Oregon won’t let us.
In fact, we encourage you to shop around. No one will beat our prices because they can’t legally do so! With our prices and exceptional customer service, we’re confident you’ll come back to us. So shop around – then schedule your move with Smooth Move People.