Wondering if moving expenses are Tax Deductible? In tax years 2018–2025, most taxpayers cannot deduct moving expenses. However, if you moved before 2018, you may be able to add your moving expenses to an amended tax return.
A military member’s move must be triggered by a military order and permanent station shift to qualify as a deductible moving expense. Let’s learn more about moving expenses and whether they are tax deductible. Use Beem to file your federal and state taxes online to get the maximum refund at the best price.
Are Relocation Costs Exempt from Taxes?
No, moving to a new house won’t deduct the costs of packing and moving your belongings. The moving expenses of moving your spouse and dependents can be deducted from your taxes if you are an active-duty military member. However, the government cannot remove moving expenses already reimbursed or paid for.
What are Moving Expenses?
A moving expense can be almost anything you spend during the moving process. All your moving expenses must be reasonable and necessary to be deducted as a moving expense.
You can deduct hotel expenses on the way to your new home when moving long distance, but not meal expenses. For 2023, the IRS has set a standard mileage rate of 22 cents per mile that you may use to calculate your travel expenses. You may track your transportation costs and deduct those instead.
- Gas
- Oil
- Parking fees
- Tolls
Also Read: Are Girl Scout Cookies Tax Deductible
What Moving Expenses are Tax-Deductible?
The moving expense tax deduction may be available to those who moved before 2018 but still need to claim it. In the same vein, active-duty military members may be eligible to claim moving expenses against their taxable income and attach them to Form 1040 as an attachment.
Active duty military members may deduct their unreimbursed moving expenses for themselves, their spouses, and their dependents. Your move must result from a military order and a permanent change of station. Expenses paid or reimbursed directly by the government cannot be deducted. The time and distance tests must be satisfied to qualify as tax deductions for these expenses.
How to Deduct Your Moving Expenses?
The IRS Form 3903 must be used by military members looking to deduct their moving expenses. Their total moving expenses will be reported on Form 1040 and individual income tax returns. It is always a good idea to consult a tax professional with questions. As moving expenses become more complex, the forms and regulations surrounding them change over time.
What is the time test?
The timing of your move must be related to the start of your new job to qualify for a tax deduction. Within the first 12 months following your move, you must work full-time for at least 39 weeks.
What is the Distance Test?
Your new place of employment must be at least 50 miles from your old place if you want to claim your moving expenses. A new job at least 70 miles away from your old home qualifies you for a deduction if you lived in a home 20 miles away from your old job.
Do Military Filers Use Form 3903?
Moving expenses should be reported on Form 3903 by military personnel:
- Line 1 of Form 3903 includes shipping and storage prices for household goods and personal effects
- On line 2, you’ll find travel, lodging, and gas expenses
- If your employer compensates you for moving expenses, you should report them on line 4 of your tax return
- Line 4 of your W-2 should also include reimbursements for payments on lines 1 and 2 that are not included in box 1
Conclusion
Most taxpayers cannot deduct moving expenses during the tax year 2018-2025. The out-of-pocket moving expenses cannot be deducted if you receive a reimbursement that exceeds them. Beem will help you file your federal and state taxes online and get the maximum refund at the best price.
The excess reimbursement must be claimed as taxable income. To lower your taxable income, you may deduct moving expenses out of pocket if they exceed what you were reimbursed.
FAQs
What counts as a qualified moving expense?
Packing, boxing, and transporting household goods and personal effects from the previous home to the new one. Using a professional moving company is possible, or the employee may move some items using his car. Among the reasonable moving expenses are:
Gas or the mileage on your vehicle
Rental trucks
Short-term storage
Packing
Insurance
Can I claim a deduction for my relocating costs if I serve in the military?
Active duty military members can deduct unreimbursed moving expenses for themselves, their spouses, and dependents if they move on orders from the military and reposition permanently.
How do I claim moving expenses on my taxes?
Expenses for moving for work can be recorded on IRS Form 3903. The form is for active-duty military members moving for work. Moving expenses will be eligible if you meet the requirements.
