Can Moving Costs be a Tax Write-Off?

The Tax Cuts and Job Acts in 2017 terminated tax deductions for most taxpayers from 2018 to 2025.

Moving to a new home can incur expenses you should claim back. Since the Tax Cuts and Job Acts in 2017 changed the tax deduction rules for moving expenses, only certain taxpayers can now claim these deductions.

Please keep reading to discover if moving expenses are tax deductible.

Who is eligible for a tax deduction?

The Tax Cuts and Job Acts in 2017 terminated tax deductions for most taxpayers from 2018 to 2025. Taxpayers are eligible for a tax deduction if they satisfy specific requirements or want to rewrite a previous return before this act came into effect. A situation like this might occur if a taxpayer made a mistake on their tax return or missed out on a valuable tax deduction. Moreover, a tax deduction is available if a taxpayer serves in the military.

Current requirements

The current requirements specify that a person is in military service and meets the requirements. Those requirements pertain to a taxpayer on active duty in the army and moving permanently due to military orders. Furthermore, a spouse or dependent of a military member is moving to a new base, or the deceased spouse or a military member was deserted or held imprisoned.

Previous requirements

When the current Tax Cuts and Job Acts expire in 2025, old requirements might come into force again. The old rules applied to taxpayers who weren’t reimbursed for moving costs by their employer, and neither excluded the exact costs from income. Eligible taxpayers are those who moved to a new location that was a definite distance from the old home or worked a minimum amount of time after the move in the first two years.

Which expenses can be reimbursed?

If a taxpayer satisfies the current requirements for a tax deduction, that doesn’t mean any expenses can be reimbursed. Namely, one must signify deductible moving expenses as reasonable and necessary. That includes rental trucks, short-term storage, insurance, packing, tolls, parking fees, and gas. In addition, one can include hotel costs for a longer move. In contrast, meals aren’t deductible or expenses covered directly by the government.

Distance and time tests

One must meet two criteria to cover mentioned travel expenses. The move must occur soon after starting new employment to meet the time standard. Furthermore, taxpayers must work at least 39 weeks in the first year. As for the distance test, the place of employment must be 50 miles or more from the old work location or home to claim moving expenses.

Let the experts do your taxes

You can determine your moving expenses using Form 3903 from the IRS. However, it’s best to leave this calculation and filing to the experts to ensure reimbursements don’t cap out-of-pocket expenses.

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