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Tax-deductible moving expenses to research

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It’s never too early to prepare for submitting your tax report! And if you’ve moved or you’re planning one before the year is over, you might be able to file a tax return on your move! Learn what are tax-deductible moving expenses and how to apply for them.

Meet the conditions

If you’d like to get some of your moving expenses deducted from your taxes you’ll first need to meet some conditions. First of all, your relocation will need to be closely related to your employment or the employment of your spouse or legal guardian. In addition to this, you’ll have to meet some general conditions with your move.

First of all, your new job address has to be at least 50 miles farther away from your old home than your old job was. For example, if you were living in Washington D.C. and your job was 20 miles from your home, your new job has to be at least 70 miles from your old home to make you eligible for deductions. Apart from the distance conditions, you’ll need to meet the time test. To meet this test, you need to be employed for at least 39 weeks in the following year.

Moving back to the States

If you’re a moving back to the USA you can deduct some of your moving costs when you file your taxes. You’ll need to meet some criteria to get a deduction for your relocation back. They’re different for retirees, descendants and spouses of USA citizens working abroad. So, make sure you research them all well. Keep in mind the limiting factors though:

  • move back – you’ll need to move back to the USA for your move to be deductible. In some cases, there’ll be no tax-deductible moving expenses unless you move to the same address where you had lived. 
  • spouses and descendants – you won’t be able to get money back from your move unless you move in a certain period of time.
  • retirees – once you retire back home, you won’t be able to move out of the country for a while deduct your move from your taxes.
The flag of the USA.
Citizens who move back to the USA can have their move deducted from their taxes.

Paperwork

A lot of paperwork always accompanies taxes and it’s no different with your tax-deductible moving expenses. That’s why you’ll want to start doing your research as soon as you can. You can start by taking a look at IRS form 3903. This is the main document you’ll need to supply for getting your tax deductions. If you’re not sure how to name and cite your expenses, contact the IRS or call in an accountant. It is very important to understand this form, so don’t be afraid to ask for help!

A lot of moving paperwork,But your tax-deductible expenses don' have to be like this.
There’s a lot of paperwork tied to moving.

There’s a lot of paperwork tied to moving as well! Make sure you change all your state regulated paperwork before you submit all of the necessary documentation for your tax deduction. This should make your tax report easier to fill out. Besides, as we’ve mentioned before, it’s never to early to start thinking about your taxes. If you keep up with your paperwork throughout the tax year, you won’t be stressed out when it’s time to submit your tax report.

Tax-deductible moving expenses

These are the expenses you can deduct once you file your taxes. Keep in mind that all of the expenses you can ask a return must relate to your or your spouses move.

  • transportation expenses – the cost of moving your belongings from one location to the next.
  • gas – if you decide to drive your car to your new home instead of transporting it, you can deduct the cost of gas for that ride. If you collect your receipts and toll payments, you can submit that when you file your tax return. Or you can use the standard IRS free of 17 cents per mile.
  • travel expenses – if you need to spend a night in a hotel during your relocation, the lodging will be deductible.
  • storage expenses – deduct storing your belongings during a long-distance relocation.

Moving your business

If you’re self-employed or moving your business, the conditions for your tax-deductible moving expenses will be a bit different. You’ll need to meet the distance conditions, but you’ll need to work 78 weeks in the year following your move. The good news is that you can still you get your moving deductions. To have enough time to finish everything you can hire reliable commercial movers to help you relocate your office. This way you’ll have more than enough time to research and submit all your paperwork.

A person jumping to better business opportunities.
You can deduct relocating your business when you file your tax return.

Your moving costs must be reasonable to make them deductible. This means that there are certain limits for what you can deduct from your taxes. If you used your relocation to travel, you won’t be able to deduct every mile of that journey. You can only get your money back for the shortest route from your old home to your new home. In addition to this, if you’re planning to ship your belongings from a location different from the one you’re living in, you might be in for a treat. In this case, the limit you can deduct is how much the shipping would cost from your place of living.

For example, if you’re moving from D.C. to Miami and shipping your things from your parents’ house in Los Angeles, you won’t be able to deduct the entire cost. The highest amount you can get back is what it would cost to ship your items from D.C. to Miami. This is why it’ and excellent ides to always calculate your overall moving costs before your move. This way you’ll have a budget ready and all the necessary tax-deductible moving expenses already quoted by your moving company. Filing a tax report will be a piece of cake!