Moving in any capacity is often an enormously inconvenient expense. One seemingly-intuitive solution, especially for those moving for professional reasons, is to write off these necessities in your taxes. Simple enough, or so one would think.
What moving expenses are tax write-offs? Unfortunately, beginning in 2017, the requirements for what counts as legal tax write-offs for those relocating became much stricter.
Active military members moving in response to a permanent change of station nearly always qualify. However, if you or a family member meet this description, all of your moving expenses will likely qualify as tax write-offs come April next year.
Which Moving Expenses Qualify for Tax Write-Offs?
Beginning in the 2018 tax year, the 2017 Tax Cuts and Jobs Act rendered all non-military house moves after 2018 non-deductible, even if done for professional reasons. If your move occurred before the 2018 tax year, however, you might still be able to amend a previous return.
What moving expenses are tax write-offs? There are more than a few:
- Gasoline bought to move your belongings or your family (the IRS mileage rate is 17 cents per gallon)
- Parking fees and tolls
- Any rentals and services (trucks, movers, and other equipment)
- Short-term storage between homes, but only up to 30 days
- Packing materials and labor
- Any insurance associated with your move
- Lodging as you make the transition, but none of your meals on the road
If you qualify, you need to know a few other things if your move is unrelated to a military order. The following cases may impact what you can legally write off on your taxes.
Moving Within a Short Distance (The Distance Test)
The IRS distance test states that your new place of employment must be a minimum of 50 miles farther from your old home than your previous place of employment. However, this does not apply to active service members moving for military-related purposes.
Moving Long After Getting Hired (The Time Test)
If you were hired more than 12 months before your move, you might not qualify. To meet this standard, you must have at least 39 weeks of full-time documentation within the first 12 months after relocating.
Worth noting, though: You can still file your claim before actually meeting this requirement if you’re legitimately on track to do so before reaching your 39-week mark. If a person has been laid-off, has a disability, or transfers within the same organization, this requirement may also be relaxed.
How to File for a Moving Write-Off Tax Amendment
To amend a claim as an active-duty military member, you must document your moving deductions on IRS Form 3903, attached to Form 1040. To carry out this process, your move must be in response to a military order asking for a permanent change of station.
The process will be largely the same for civilians hoping to deduct moving costs validated before the 2018 tax year. Your previous move should qualify as long as you can prove that you meet the requirements outlined by both the time test and the distance test.
Moving Expenses and Tax Write-Offs: How to Make the Most of Your Situation
While the Tax Cuts and Jobs Act does limit what people moving currently stand to benefit from come tax season, we’re happy to report that many professional relocations that took place before its passage qualify.
Non-profit organizations like ModestNeeds.org and other local movements can all offer you a lending hand. It’s not always possible to do it all yourself, but our advice is to do what you can. A rented Penske, a couple of pals, and an honest day’s work are more than enough for small moves—beyond that, local moving companies like Colonial Van Lines can often offer you more for less.
If you’re ready to take the plunge, we invite you to try your luck with us. Get in touch for a free quote online. We can take care of the rest.