What Costs Qualify as Moving Expenses?
What are moving costs?
Moving expenses, in the Internal Revenue Service, are the costs incurred by a taxpayer related to relocating for a new job or transferring to a new location. The Tax Cuts and Jobs Act of 2017 (TCJA) eliminated the moving expense deduction for tax years 2018 through 2025, except for active-duty military members moving pursuant to a military order.
If you’re military, read on to find out how tax deduction for work moving expenses.
And, if you’re in the military, you’ll find this page fascinating to read: This is the military tax relief page on the IRS website.
Key points to remember
- The Tax Cuts and Jobs Act of 2017 (TCJA) eliminated moving expense deductions for most taxpayers.
- For tax years beginning after 2017 and through 2025, only active duty members of the United States Armed Forces can deduct moving expenses, and only if they are due to a military order.
- To claim the cost of moving expenses as federal income tax deductions, members of the armed forces can use IRS Form 3903.
- Within certain limits, you can claim deductions for moving, storage, insurance and travel expenses.
Understanding moving costs
The Tax Cut and Jobs Act of 2017 eliminated the deduction for moving expenses, among other things. The law is in effect until 2025, and there is no way to predict what will happen then.
In any case, active duty members of the United States Armed Forces can still deduct moving expenses if incurred in response to a military order that requires a permanent change of station.
A permanent change of position includes one of three scenarios: 1) a move from your home to your first active duty position, 2) a move from one permanent position to another, or 3) a move from the last position of active service to your home that occurs within one year of the end of active service or as permitted by joint travel regulations.
Qualifications for Moving Expenses
Members of the armed forces must use IRS Form 3903 claim the cost of moving expenses as a deduction on their federal income tax.
When trying to determine if your moving expenses are tax deductible, the key phrase to consider, at least in the eyes of the Tax Service (IRS)— are “reasonable costs” to move yourself and your property.
The basic categories of allowable costs include moving expenses, storage expenses and travel expenses.
Moving expenses
You can deduct certain expenses related to moving your household goods and personal effects. Examples of these expenses include the cost of packing, crating, transporting a trailer, storage in transit, and insurance.
Note that you cannot deduct the cost of moving furniture or other goods you purchased on the way from your old home to your new one.
Storage costs
You can deduct costs related to transport, store and insure your household items and personal effects. These expenses must be incurred within a period of 30 consecutive days after your goods have been moved from your old residence and before they are delivered to your new one.
Trip costs
Within certain limits, you can deduct travel expenses from your old home to your new one. You cannot deduct the cost of meals. You can deduct accommodation expenses (with limits), car expenses and plane tickets.
If you use your car to take yourself, your household members, or your household goods to your new home, you can calculate your expenses by deducting one of the following:
- Your actual expenses, such as how much you pay for gas and oil for your car, as long as you keep accurate documentation of each expense.
- Or the standard kilometer rate. This rate was 16 cents per mile for the 2021 tax year and 18 cents per mile for the 2022 tax year.
Whichever method you use to calculate your expenses, you can deduct parking fees and tolls you pay to move. You cannot deduct the cost of repairs, maintenance, insurance, or depreciation of your car.
If you plan to claim these deductions, keep good documentation of any expenses that may qualify.
If the government provides and pays for any of your moving or storage expenses, you should not claim those expenses as a deduction from your taxes.
Non-deductible moving expenses
Some expenses that are generally not deductible include house hunting trips, costs of entering into or breaking a lease, and costs related to buying or selling a home. When traveling from your old home to your new home, you cannot deduct the cost of what the IRS considers extravagant accommodations or unnecessary side trips.
You can consult the instructions for IRS Form 3903 for more details on non-deductible expenses.
If you paid moving expenses and were later reimbursed by the government, you will not be able to claim those expenses as a deduction from your taxes.
