What moving expenses are tax deductible?
Hello, tax season!
Now that the 5th season of the year is here, we know that there are many of you with questions about what can and cannot be deducted on your return in relation to your recent move. We’ve researched and found the answers to many of your questions. Let’s talk about the ins and outs of moving and tax deductions with some basic information, then dive into some more detailed questions you may have about what is and isn’t tax deductible.
Does Your Move Qualify for Deductions?
Before we begin, I want to do a double check with you to make sure you meet all the requirements to deduct your moving expenses. Wouldn’t want any surprises when you file, right?
According to the IRS Topic 455, you can deduct moving expenses “If you moved due to a change in your job or business location, or because you started a new job or business.”
Meet the requirement? Great. Moving on…
The IRS has three basic requirements you have to meet in order to qualify to deduct your expenses:
- Your move is closely related to the start of work
- You meet the distance test
- You meet the time test
We’ve covered all three requirements in detail in our post about how to deduct moving expenses. If you have questions about whether you meet these requirements so far, we recommend contacting a tax professional or the IRS.
Alright, if you’ve checked off all the boxes and you’re certain that you meet the requirements to deduct your moving expenses, it’s time to find out what moving expenses are tax deductible.
Moving Expenses That Are Tax Deductible
According to the IRS Publication 521, deductible moving expenses include:
Travel by car – you can deduct the gas and oil for your car if you keep an accurate record of each expense, or you can deduct the standard mileage rate of 24 cents per mile. Whether you deduct the actual expenses or the standard mileage rate, you can also deduct parking fees and tolls you pay to move.
- Packing and moving – this includes the cost of packing, crating, and transporting your items to your new home.
The cost of connecting and disconnecting utilities
The cost of shipping your car
The cost of shipping your household pets
Lodging expenses (including the day you arrive)
In-transit storage and insurance – as long as it within any period of 30 consecutive days after the day your things are moved from your former home and before they’re delivered to your new home.
- The cost of moving your things from a place other than your former home.
Keep in mind that you can only deduct those expenses that reasonable for the circumstances of your move. You should take the shortest, most direct route available to your new home. If you make side trips or stopovers during your move, those expenses are not deductible.
Also, you can only deduct expenses for one trip per person. Members of your household do not have to travel together or at the same time.
How to figure your tax deductible moving expenses for your return
To figure all these costs from your move, have an accurate record of your expenses (receipts, statements, bills, mileage logs, Bill of Lading, etc.) and use Moving Expenses Form 3903.
If you moved with U-Pack in the last year, you can get a copy of your Bill of Lading and Delivery Receipt here.
What’s not tax deductible when moving
- Food expenses
- Costs of detours or sightseeing on your way
- The cost of furniture you buy on the way to your new home
- Car tags
- General maintenance of your vehicle
- Car insurance
- Depreciation of your car
- Any part of the purchase price of your new home
- Security deposit
- Driver’s license
- Expenses of buying or selling your home
- Expenses incurred from breaking a lease agreement
- Home improvements to help sell your home
- Loss on the sale of your home
- Losses from ending memberships in clubs or organizations
- Mortgage penalties
- Real estate taxes
- Pre-move house hunting expenses
- Remodeling of your new home
- Return trips to your former home
- Storage charges (outside of those incurred in-transit as stated above)
- Tips you give the movers
- Temporary living expenses
And just to note, if your employer is paying for your move, your move isn’t tax deductible. If you pay for the move and your employer reimburses you, you must claim that money as income on that year’s tax return.
If you have a question about whether something is tax deductible or not in relation to your move, we recommend contacting your tax advisor or the IRS.
But what if…
We understand that everyone’s circumstance is different. Here are some situations where you might not know if you can deduct moving expenses or not:
If you’re moving due to a divorce – You cannot deduct moving expenses on your tax return due only to a divorce. However, you may want to talk to your attorney to see who is responsible for moving costs due to the divorce.
If you’re moving because of an illness – You cannot deduct moving expenses on your tax return due to an illness. However, you may want to see if your health insurance provider includes relocation coverage in your policy.
If you’re moving to attend college – You cannot deduct moving expenses on your tax return for moving to college. However, you may be able to deduct interest you pay on a qualified student loan.
- If you’re in the military and moving due to a PCS – You do not have to meet the distance and time tests if you are a member of the Armed Forces on active duty and you move due to a permanent change of station. Click to view the ‘Member of the Armed Forces’ section in Publication 521 to get specific information from the IRS about PCS tax deductions.
What other questions do you have about “What moving expense are tax deductible?”
We’d love to help get you pointed in the right direction. For all your tax-related questions, we recommend calling your tax advisor or the IRS at 1-800-829-1040 (for individuals). You can also visit or call your local IRS office.
If you have any questions about moving or want to get a moving quote from U-Pack, leave a comment below or call 800-413-4799. We’d love to help you move long distance for an affordable price.