Moving can be an exciting moment in your life – it can be a chance to explore a new area, get a fresh start, or live in your dream home.
However, moving from one home to another can also be a very stressful task. From packing your things to driving and unloading to familiarizing yourself with a new environment, managing the moving logistics can be expensive and time-consuming.
And what about those expenses? Is there a way to cut some of these costs to make them easier to swallow?
Specifically, are moving expenses tax-deductible? Below you’ll find out whether or not you can write off moving costs on your taxes.
Are Moving Expenses Tax-Deductible?
No, moving expenses are generally not tax-deductible. In a few particular cases, however, there may be an exception in which moving expenses are tax-deductible.
No longer can the majority of Americans deduct moving expenses on their federal tax returns. The tax reform altered the rules regarding moving costs.
The Tax Cuts And Jobs Act
Before the Tax Cuts and Jobs Act (TCJA), qualified moving expenses were considered an above-the-line deduction to reduce a person’s taxable income.
This meant you did not have to itemize your federal tax return deductions. So you could recoup the costs of relocating for work or looking for a new job while still taking the standard deduction.
The 2017 Tax Cuts and Jobs Act altered the requirements for deducting moving expenses. Moving expenses are no longer deductible for most taxpayers, meaning you cannot claim this deduction on your federal tax return.
This modification will remain in effect for tax years 2018 through 2025. The moving expense deduction is suspended until 2025, beginning with the 2018 tax year.
Conditions For Deducting Moving Expenses
Despite recent legislation, many states, including California and New York, still permit moving expense deductions on state tax returns.
If you are a military member on active duty, you can deduct moving expenses from your taxable income by attaching Form 3903 to your Form 1040. The deduction is still available to military personnel, but they must meet specific requirements to qualify.
To deduct moving-related expenses on your 2020 tax return, you must satisfy both of the following conditions:
- You are an active-duty member of the Armed Forces.
- Due to a permanent change of station, you relocate.
The IRS defines “permanent change of station” as a move from your home to your first post of active duty, a move from one permanent post of duty to another permanent post of duty, or a move from the last post of duty to home or a closer location in the United States, which typically must occur within one year of ending active duty.
A spouse or dependent of a military member who is imprisoned, deceased, or deserted may be eligible to deduct moving expenses.
Which Costs Are Tax-Deductible?
When relocating within the United States, qualifying expenses include the cost of transporting household goods and personal property. You may also deduct the cost of gas, tolls, and parking if using a personal automobile. Also included is the cost of lodging during travel to the new home, but meals and food are not.
In addition, you can deduct the cost of transporting your vehicle, disconnecting your utilities, and storing your belongings for up to 30 days before they are delivered to your new home in the United States.
All the expenses mentioned above are deductible for active-duty military personnel moving to a permanent station outside the United States, in addition to the cost of storage for household goods and personal property for the duration of your stay in your new location.
Moving expenses are no longer tax-deductible unless you are an active member of the military or if you are the spouse or a dependent of one.
