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Ask Allied: Are Moving Expenses Tax Deductible?

by Jackie Heath on Feb 5, 2018

If you moved in 2017, you’re probably looking at your pile of receipts and wonderingtax form how much, if any, you can deduct on your taxes. IRS rules allow you to deduct moving expenses only if you meet certain requirements:

  • Your move is related to a new job or employment change;
  • Your new location is at least 50 miles further than you’ve had to travel in the past (also known as the distance test); and
  • Your move meets the time test (closely tied to the start of a new job or employment change) and you will work at least 39 full-time weeks in the first year.

You should consult a tax attorney or accountant to determine if your move meets these criteria, especially If you’re in the military. You should also know that reimbursements from your employer may be taxable if the IRS finds that they exceed what they consider deductible.

Even if you meet the requirements, not all of your expenses are deductible. Only the following items are allowed:

  • The cost of your move (hiring movers, renting a truck, and any mileage charges)
  • Packing materials (boxes, tape, padding, etc.)
  • The cost of temporary storage
  • Travel costs for you and your family (plane fare or mileage to your new home, overnight hotel stays along the way, but not food.)
  • Utility fees related to connecting and disconnecting electrical, gas or other services.

This being the IRS, you will need documented proof expenses are related to your move, so find and label receipts. It may help to use a spreadsheet or app, especially if some of your expenses have been or will be reimbursed by your employer. Note those that are deductible, reimbursable, or neither. This will help you see what the true cost of your move was, as well as how much of the cost you were responsible for.

Expenses that are not eligible include house hunting expenses, including travel, security deposits, mortgage fees, and the costs you incur when selling an existing home and buying a new one. Some of these costs may be deductible elsewhere on your taxes.

Moving in 2018?

Due to the new tax law, if you move this year, you may not be able to deduct your moving expenses as easily. That’s because deductions have been cut while the standard exemption has been increased. However, since the rules for 2018 are still being established, it’s hard to say. Consider talking to a tax advisor in the run up to your move, and keep receipts in case you will be able to take a deduction.

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