Did you know you can deduct your moving expenses on your tax return?

To be eligible for a moving expenses deduction, your move must be related to work. Did you start a new job, transfer to a new location, or move for other work-related reasons?  If so, you may qualify for a deduction.

Here are three important tips to help you lower your tax burden.

1. Have Eligible Moving Costs

Answer the following questions to find out if you have eligible moving costs.

Q1: Did you move to a tropical island, buy your dream home, or move to the big city? Congratulations! You’re living a grand and wonderful life. Do you qualify for a moving deduction? That depends, see Q2.

Q2: Did you move because of work? Yes? Well, you’re in luck. To be eligible for a moving deduction, you must be moving because of work.

Q3: Do you pass the time test? To pass the time test, within the first 12 months after your move, you must start your new job and work full-time for at least 39 weeks.

Q4: Do you pass the distance test? To pass the distance test, find the distance from your old home to your new job. Then, find the distance from your old home to your old job. If the distance from your old home to your new job is at least 50 miles more than the distance from your old home to your old job, you pass the distance test.

Sounds odd, right? Let’s walk through an example. Let’s say the distance from your old home to your new job is 60 miles, and the distance from your old home to your old job was 3 miles. Because 60-3 = 57 miles, you pass the distance test.

In contrast, let’s say the distance to your new job is 60 miles, and the distance to your old job was 11 miles. You do not pass the distance test because 60-11 = 49 miles.

If you are a member of the Armed Forces and your move is due to a military order and permanent change of station, you do not have to satisfy the time test or distance test.

Q5: Did you pay your moving expenses? You can only deduct moving expenses that you yourself have paid. If your employer paid some of your moving costs, or you will be reimbursed, you cannot deduct those expenses.

Now that you know you’re eligible for a tax deduction, which moving expenses can you deduct?

2. Deduct Every Moving Expense You Can Imagine

You can, and should, deduct the cost of hiring movers to transport your goods from point A to point B. However, I bet there are at least three other moving expenses you can deduct. Any expense that is both reasonable and necessary for your move counts as an eligible deduction. How many of these moving expenses can you claim?

• Cost of connecting or disconnecting utilities

• Cost of shipping your vehicle

• Cost of shipping your pets (also see Tips for Moving with Pets)

• Cost of rental trucks

• Cost of moving pods

• Cost of hiring movers

• Cost of hiring packers

• Cost of moving help (for example, hiring a professional organizer to help you move)

• Cost of transporting or moving your household goods

• Cost of moving your household goods from a place other than your former home (yes, you can deduct the cost of moving your things from storage, your grandma’s house, or your cousin’s garage)

• Cost of storing and insuring household goods

• Storage fees

• Gas or mileage on your vehicle

• Cost of staying at a hotel (if you are moving a long distance)

• Parking fees

• Tolls

• Cost of moving boxes

• Cost of moving supplies (yes, packing tape counts)

• Order Your Life Moving Kit (yes, this is a tax-deductible expense)

3. Use the IRS Interactive Tax Assistant

You know the IRS has a million rules about what you can and cannot deduct from your taxes. Lucky for us, there is the Interactive Tax Assistant (ITA) tool. Specifically, the ITA tool called Can I Deduct My Moving Expenses? will guide you through a list of questions to help you determine your eligibility to deduct moving expenses. In less than 10 minutes, you will know whether you qualify and which expenses you can deduct.

Want to know more? Go to the IRS website to learn more about Moving Expenses and the many tools available through the Interactive Tax Assistant.

Update: July 25, 2019 – Due to tax reform under the Tax Cuts and Jobs Act (TCJA), tax deductions for moving expenses have been suspended until 2025.

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