Deducting Moving Expenses on Your Taxes

If you moved in 2017, you may be able to deduct moving expenses from your taxes. Learn which expenses are usually deductible and see if you meet the IRS' tests for deductions.

tax formsIf you moved in 2017, you may be able to deduct moving expenses on your taxes, provided you meet certain requirements. According to the IRS, you can deduct moving expenses only if the three following requirements are met:

                Your move is related to a new job or change in employment;

                You meet the distance test (your new location is at least 50 miles further than you’ve had to travel in the past); and

You meet the time test and will work at least 39 full-time weeks with the first year.

You should consult with a tax attorney or account to determine if your move is eligible, especially if you’re in the military. Also know that reimbursements from your employer may be taxable if they’re more generous than what the IRS considers deductible.

But if you meet the requirements, know that not all of your expenses will be deductible. The IRS allows the following items:

  • Moving costs (hiring movers or renting a van, as well as mileage charges)
  • Packing materials (boxes, tape, padding, etc.)
  • Storage expenses
  • Travel costs (plane fare or mileage to your new home, overnight lodging along the way, but not food)
  • Utility fees related to connecting and disconnecting services.

Keep receipts and contracts! You must have documented proof that these expenses are related to your move.

Non-eligible expenses include items associated with setting up a new home and establishing residency, like house hunting expenses, including travel, security deposits, mortgage fees, and the cost of selling an existing home and purchasing a new one (these may be deductible elsewhere on your taxes, however).

Documentation

Keep track of moving recipts and expenses in a spreadsheet or app, especially if some of your expenses will be reimbursed by your employer. You can note those that are tax deductible, those that are reimbursable, and those that are neither. If you record and track all moving expenses, you’ll know what the real cost of your move was, as well as how much of it you were responsible for.

Moving This Year?

Due to the new tax law, if you move this year, you may not be able to deduct your move as easily as in previous years. That’s because deductions have been slashed while the standard exemption has been increased. It’s hard to say, however, because the rules for 2018 have yet to be established. Be sure to keep receipts and talk to your financial advisor or accountant. 


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