Moving for a new job can be an exciting milestone, but it can be expensive. Luckily, in some cases, you can take advantage of tax deductions to cover your expenses, as explained below.
Who Can Benefit From These Tax Deductions?
The rules on tax deductions for moving expenses changed due to the 2017 Tax Cuts and Jobs Act, meaning that most people can’t claim tax deductions due to a relocation. However, there are exceptions. For example, if you moved before 2018 and never filed a claim, you can still amend your previous tax return and receive a deduction. There are also still deductions for military personnel. Some states may choose to offer deductions on your state tax return, which is always worth considering before you file your tax return.
To meet the criteria, you need to be able to prove that your commute would have increased by over 50 miles if you hadn’t moved and that you worked full-time (at least 39 weeks) in the first year in your new area. If you’re married, only one person needs to meet the criteria.
What Moving Expenses Can I Deduct?
The IRS has a complete list of expenses that can be deducted. The main ones to consider are moving company services, short-term storage of belongings, and transportation for you and your family to your new home. You can also deduct the cost of packing supplies like boxes and any insurance charges.
However, you cannot claim deductions for certain costs, such as the cost of meals on your trip or house-hunting expenses. You also can’t deduct anything that your new employer reimbursed you for.
How Does It Work for Military Personnel?
Military personnel can still benefit from tax deductions for moving expenses, and the above criteria do not apply to them. As long as you’re moving to a new permanent base or making a final move after retirement, you can benefit, even if you didn’t move very far.
Therefore, you should make sure that you keep track of your expenses when moving, especially the costs of hiring movers and transporting your family. You will need to fill out Form 3903 to receive your deductions.
Whether or not you qualify for tax deductions, moving is a challenging yet exciting life event. If you’re looking for professional residential moving services to help you with your long-distance move, don’t hesitate to reach out to our team today! We have plenty of moving tips for a variety of scenarios.