According to Section 162 of the tax code, for a business expense to qualify as a tax deduction, it must be considered “ordinary and necessary.” Apparently, as of 2018 (and at least until 2026), a business move is neither. Whether the definition of “ordinary and necessary” changed in 2018 or Congress’s interpretation of it did is not clear, but either way, the policy certainly changed. And as a result, unless you’re a qualifying member of the armed forces, you can no longer deduct moving expenses from your taxes.
So, what happened? The TCJA, specifically. While the Tax Cut Jobs Act of 2017 increased the standard deduction for most taxpayers, it reduced many of the deductions that had been used to reduce tax liability – the moving expenses deduction being one of them. If it sounds confusing, it’s probably meant to. But at Colonial Van Lines, we’ll try our best to clarify.
Moving Expense Deductions: The Way They Were (And Might Be Again)
So, let’s turn our clocks back, way back to 2017, and you have just been told that your company wants you to relocate to another state. You think, “This business move seems ordinary and necessary. I wonder if it would qualify for a tax deduction.” Well, you would be eligible to get one if you met the following criteria:
- Your move would have had to take place within one year of starting work at your new location.
- Your new workplace was at least 50 miles further from your previous residence than your old one was.
- You worked at least 39 weeks in your new job location in your first year of employment there.
Moving Expenses Deductions: The Way They Are (And How You Might Still Be Eligible)
Now, let’s travel back to the present, and the not so distant future, at least until 2026. You’ve just been told that your company wants you to relocate to another state, and again you consider this move to be standard and requisite – if you do indeed intend to keep your job. Once more, you wonder if you qualify for a moving expense tax deduction. But this time, the criteria has gotten a bit more exclusive. You are and will be eligible for a tax deduction if:
- You’re an active-duty military member moving for a military relocation.
- You live in a state that still allows moving expenses to be deducted (and you meet the criteria above). See americanexpress.com for states that still allow a moving expense deduction.
And not only will your move not lower your tax bill: it may actually raise it. If your employer gives you money towards the move, that money is considered ordinary income. Because it’s considered ordinary income, you’ll be expected to pay taxes on it.
Will the Sun Come Out Tomorrow?
As of now, the moving expense deduction is set to return on January 1, 2026, but Congress is working on making its removal permanent. That means a lot of us are going to have to look for new ways to make moving expenses less costly.
At Colonial Van Lines, we may not be able to make your business-related move tax-deductible, but we sure can make it more affordable. Here are some of the ways we keep our customer costs low, and our satisfaction ratings high:
Customized Moving Plans
When you work with us, every move is necessary, and no move is ordinary. Count on our team of experts to come up with a plan in according to your budget and suited to your requirements.
Full-Service Moving
When it comes to moving, time is money. You don’t have either to waste. Our team of experts is committed to handling every aspect of your move efficiently and effectively to save you both.
Packing
At Colonial Van Lines, packing is an art, and our team of packers has mastered it. We handle each of your belongings with the same degree of care we put into every aspect of your move. On moving day, our packers will show up with our specialized materials and blanket wrapping in tow, ready to get the job done.
Long Distance Moving
You don’t get to be the Nation’s Top-Rated Moving Company without having moved across the nation a few times. At Colonial, we’ve been doing it for over 50 years. Depend on us to come up with a transportation plan that optimizes your time and minimizes your stress.
Free Rate Quotes
When your moving expense is not tax-deductible, you can’t afford a moving company that hides service charges in its contract. We provide free rate quotes so you can see where your expenses are coming from. Let us know which services you need, and we’ll give you a detailed, reliable, verifiable moving quote. There’s no fine print, no hidden fees, and no messing around.
The bad news is that you can no longer deduct moving expenses from your taxes. The good news is that Colonial Van Lines is on your side, and by your side, through every aspect of your move. Contact us today for our free rate quote, and let us do our best to make your move the best it can be.