Can moving expenses be deducted?
Moving can be an expensive endeavor, but did you know that you may be eligible to deduct some of your moving expenses on your taxes? While moving expenses were previously deductible for anyone moving for work-related reasons, recent changes to the tax law have limited this deduction to specific circumstances. So, let’s explore whether you can still deduct your moving expenses or not.
The Tax Cuts and Jobs Act of 2017 (TCJA) brought about significant changes to several areas of the tax code, including the deduction for moving expenses. Under the new law, only active-duty members of the military are eligible to claim moving expenses as a deduction. Unfortunately, this means that individuals moving for work-related reasons, such as a new job or a job relocation, can no longer deduct their moving expenses.
Now that we’ve addressed the main question, let’s dive into some common FAQs related to moving expenses and their deductibility.
1. Can I deduct my moving expenses if I’m in the military?
Yes, the deduction for moving expenses is still allowed for active-duty members of the military, as long as the move is due to a military order.
2. I moved for work before the TCJA came into effect. Can I still deduct my moving expenses?
No, the new law applies to all moves conducted after December 31, 2017. Even if you moved for work before this date, you are not eligible for a deduction.
3. Can I deduct my moving expenses if I moved to pursue higher education?
No, moving expenses related to education are no longer deductible under the new tax law.
4. Are any moving expenses still deductible for non-military individuals?
No, the TCJA eliminated the deduction for moving expenses for all non-military individuals.
5. Do I need to itemize my deductions to claim moving expenses?
No, even if you choose the standard deduction, you can still claim moving expenses if you qualify. However, since most people no longer qualify, this deduction is rarely utilized.
6. What if my employer reimburses me for my moving expenses?
If your employer provides moving expense reimbursements, you no longer have to include those reimbursements as taxable income, thanks to the TCJA changes.
7. Can I claim moving expenses if I work remotely for an out-of-state employer and move to another state?
No, under the new tax law, only moving expenses related to military orders are eligible for deduction.
8. Can I deduct storage costs for my belongings during the move?
No, storage costs are not eligible for deduction under the current tax law, even if related to a qualified military move.
9. Can I deduct my travel expenses to and from my new home?
No, travel expenses, including those for house-hunting trips, are not deductible under the current law.
10. Can I deduct the cost of hiring professional movers?
No, the cost of hiring professional movers is not deductible for non-military individuals.
11. Are there any other tax benefits or credits available for moving expenses?
Generally, no. However, it’s important to consult a tax professional to understand if any state-specific tax benefits or credits may apply to your situation.
12. Can I claim moving expenses if I’m self-employed?
No, the deduction for moving expenses is no longer available to self-employed individuals, regardless of their profession.
While it’s disappointing to see the deduction for moving expenses get restricted, it’s crucial to stay informed about changes in tax laws to avoid any surprises come tax season. Remember, if you have any specific questions or concerns regarding your eligibility for moving expense deductions, it’s always wise to consult a qualified tax professional who can provide personalized advice tailored to your situation.