Are Moving Expenses Tax Deductible? Everything You Need to Know

Are Moving Expenses Tax Deductible? Everything You Need to Know

Person filing deductible moving expenses

Moving is stressful in many ways. Oftentimes, the focus is on the packing and shipping of you and your household. However, many do not focus on the effort and time that it takes to get the money that you need to move in the first place. It can be appealing to try and save some of that money after your big move. For many, this has come in the form of deductible expenses that happen during a move.

Are Moving Expenses Tax Deductible?

Before getting into the ins and outs of moving expenses and how they impact taxes, it is best to ensure that you know what a deductible expense is. A deductible expense is any money spent that can be taken from tax forms. This can mean you owe fewer taxes. The bad news is any move after 2018 is not deductible due to tax reform, with the exception of military personnel.

Qualifications of Tax Deductibility

So, if you are a part of the military and you are moving due to work, congratulations! You qualify to mark moving expenses as deductible from your taxes. There are some qualifications though.

If you are not military personnel, there are other ways to make moves cheaper.

Your move must be permanent. If you are constantly moving due to service, but are not in a permanent residence you cannot file those expenses on your taxes. The expenses must be necessary and reasonable for your move.

You must move close to the beginning of your employment. You have to work at your job for at least 39 weeks in the first 12 months of your employment.

There is the exception of if you start your new job before your family moves in with you, expenses related to that may also be filed as deductible. This exception has to occur due to a family member receiving medical care, a child finishing the school year, or other unavoidable life events.

You must move to a place 50 miles farther from your old workplace compared to the distance of your old home and previous place of employment. This is extremely confusing. It basically is just proving that the move was necessary and that the distance you are moving is far enough to have expenses that are worthy of being deductible.

For example, if your old home and old work were five miles apart, then your new home and old work need to be at least 55 miles apart.

Finally, if you are filing your taxes and you find that your reimbursement is more than you spent on out-of-pocket expenses, then you can not file those expenses as deductible.

Why Am I Exempt From Deductible Moving Expenses

Previously, anyone could file moving expenses as deductible. However, in 2017, former President Donald Trump signed into effect the Tax Cuts and Jobs Act. This enforced the rule that anyone who moved after 2018 could not file these expenses as deductible unless they were part of the military or the armed forces.

List of Deductible Moving Expenses

  • Gas—you can go off of mileage or how much you spent in general. The IRS gives 16 cents per mile as of 2021. You can go off this stat if you want to calculate a deductible for a long-distance move.
  • Rental trucks – this includes almost any moving company. Rentals of trailers qualify as a deductible expense.
  • Storage — this must be short-term.
  • Packing – for example, anything that costs money to pack because of the way it must be moved. This may include renting moving vehicles, movers, or any moving service.
  • Insurance – if you buy insurance on your moving truck then it counts!
  • Hotels or Places to stay – this applies for long-distance moves only. You can not include meals for this option though.
  • Oil – this refers to possible car mishaps. Although not every vehicle malfunction is covered.
  • Parking fees- this one is straightforward. Food stops would not count here due to the previous point in the hotel requirements.
  • Tolls- this is typically a more long-distance expense.

Deductible Moving Expenses

While it is disappointing that not everyone can file moving expenses as deductible on their tax forms, this article should help you figure out the ins and out of why.

For those who can file these expenses as deductible, this article should hopefully clear some nitty-gritty details up. These concepts are confusing and can be stressful.

It can be nice to have an overview to help understand the hows and whys. Now that you can confidently file your expenses, enjoy your travels. Happy spending!

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