Moving Expenses: What Is Tax Deductible?

Just when you thought that the process of moving to a new home was a cruel form of draconian punishment, along came pesky tax deductions for moving expenses. As long as you are moving more than 50 miles or more for a new job, you can easily qualify for relocation deductions. In order to qualify, you do not even have to have a job secured. In fact, you can move with absolutely no job leads, as long as you start a job within one year of the move.

Tax Deduction Requirements in Relocating

Our Salt Lake City movers can explain the additional requirements that must be fulfilled in order to qualify for moving tax deductions, such as having worked full-time for at least 39 weeks during the first 12 months after your move. Your employer also cannot reimburse you for the moving expenses. If you meet these requirements, this list of deductible moving expenses will be a good reference:

Car. Using your own car to move comes with some perks. You can deduct gas and oil costs (just keep the receipts), and the standard mileage rate of 20 cents per mile.
Movers. The cost of packing and moving all of your belongings, as well as the cost of shipping pets or cars are all tax deductible.
Storage. Fortunately, the cost of storage for up to 30 days makes the cut as being tax deductible.
Hotels. As soon as your furniture is removed from your old house you can begin deducting expenses for any hotels you stay in, throughout the duration of your moving travels.

Here is what you CANNOT deduct:

Food. All of those stops at Cracker Barrel are, unfortunately, not tax deductible.
Moving for New Furniture. If you purchase furniture for your new home, you have to pay the price of moving it.
Side Trips. Any pit stops or exploring that you do on the way to your new home does not make the cut.
Buying or Selling Homes. Costs associated with buying or selling your home, including mortgage fees and improvements on your old home, are not tax deductible.
House Hunting. Any gas or oil costs associated with trips taken to house hunt or to visit your old home cannot be deducted.

Double-Check Your Tax Facts

Of the few tax deductions that you can claim before knowing if you will even meet the requirements, these moving expense deductions should, without a doubt, be taken advantage of.

In order to claim the deduction, TurboTax states that “you must report all relocation expenses on IRS Form 3903 and attach it to the personal tax return that covers the year of your move. In the event you do not satisfy all requirements at the conclusion of the 12-month period, you must reverse the deduction. You will either include the original deduction amount in ‘other income’ on your next tax return or amend the original return to calculate your tax without the moving expense deduction.”¹

Any accountant that you use to prepare your tax return will let you know if you qualify for the deduction.

Sources:

[1] Intuit: Turbo Tax – Guide to IRS Form 3903: Moving Expenses