How Can You Deduct Moving Expenses?

Moving Day TipsMay 23, 2019

If you are deducting taxes that are older than 2018, you may be able to use IRS Form 3903, in order to make a claim to deduct moving expenses from your federal income tax return. Deducting moving costs is allowed by the IRS, in these cases. After 2018, IRS revoked this and deductible moving expenses are applicable only in military moves, and even then only in certain circumstances.

How Can You Deduct Moving Expenses?

If you are moving to another city or state because your job requires it, for military moving, for example, you will be able to qualify to use IRS form 3903 which will allow you to claim the costs of some of your moving expenses. Not all the moving costs are eligible to be deducted, but if you are in the military and you are paying your taxes, IRS will allow you to deduct your moving costs on your federal income tax return. You should also know that all the moving costs that you pay yourself are deductible. On the other hand, if your employer is paying for your move, you won’t be eligible to file in for moving expenses deduction. Let’s see now how you can qualify in order to deduct moving expenses?

  • Time test
  • Distance test
  • Qualifying expenses
  • Form 3903
Hand on the calculator. Calculating.
If you qualify for the IRS form 3903, you will be able to deduct your moving expenses.

Deduct Moving Expenses – Time Test

Being able to qualify for the moving expenses deduction means that you will have to pass the time test first. What does that mean? The start of your new employment and the time of your move have to be closely related in order to qualify for the moving expenses deduction. Within the first year after the move, you will have to find and start a job and work full-time for at least 39 weeks to meet the standards for the moving expenses tax deduction.

You can also deduct your moving expenses long after you started working but only under some special circumstances. For example, if your spouse couldn’t move with you immediately because of health issues. Your kids will be able to finish their school year near your old home and after that move and join you. These are special situations when you are able to deduct moving expenses even long after your first day of work.

If you are one of the members of the military and you haven’t figured out yet how to prepare for the move, you should check on the military moving checklist!

Distance Test

The second thing is the distance test. It is actually the distance between your new workplace and your old home. In order to qualify for the distance test, and claim your moving costs, your new working place has to be at least 50 miles away from your old home than your old working place. Let’s see this on an example! To be able to qualify for the distance cost deduction, your new workplace has to be at least 70 miles away from your old home if your previous job was only 20 miles away from your old home.

In addition, if the United States military members are making a permanent change in their military statuses, such as termination of service or retirement, they are eligible to claim their moving costs regardless of employment requirements or the distance.

And in addition to that, if you need to store some of your items because you are downsizing, read an article about how to use self-storage facilities?

How to deduct moving expenses? Qualify for the distance test!
If you want to deduct your moving expenses, you will have to qualify for the distance and time tests!

Qualifying Expenses

When you decide to claim your moving expenses, you have to know that they have to be reasonable and necessary for the move. Reasonable moving expenses are mileage on your car or costs of gas, short-term storage, rental truck, and boxes. If you are making a long move, you should include costs of lodging and hotel services. You should also know that eligible travel costs include oil, gas, parking fees and tolls.

Do you need storage space for your belongings? Find out what are the benefits of renting a storage space?!

Deduct Moving Expenses – Form 3903

This is how you should fill in your form 3903 (each number refers to a line – first, second, third, fourth):

  1. Storage and Shipping costs
  2. Travel and lodging costs
  3. Gas costs
  4. Reimbursements from your employer for any moving expenses

You will not be able to receive deduction to moving expenses if the total amount exceeds the expenses that came out of your pocket. In that case, you will have to file everything that went over as income that will be taxed. However, if you spent more money out of your own pocket than you got from your employer as reimbursement, you are then able to receive deduction to your taxable income. Basically, if you spent more, you get reimbursed more. If you spent less, then you will get smaller, if any, deduction.

Professional Moving Company

Whether you are making a long or short-distance move, you might need a professional movers’ help. If you have to move on short notice, you will most likely need professional packing services Columbus too. Every professional moving company has a license and well-trained workers. Call your professional mover and schedule house inspection. After the inspection, a professional mover will give you the info about your moving costs. A professional moving company has a lot of moving services. They will provide:

  • Excellent communication with their clients
  • Packing and Proper Labeling services
  • A wide pool of moving trucks
  • Security and Moving Insurance
  • Unpacking and Recycling
  • Storage Units/Solutions
  • Special Services (Moving and carrying bulky and heavy items such as piano or home safe, etc.)
People at meeting. Handshake.
A professional mover will provide all the necessary moving services for your move.

Other ways to save money when moving

There are also a lot of other ways to save up some money when moving. First of all, you should save up on packing materials! Ask some of your friends or neighbors who moved recently if they have some packing materials left. You can also find free cardboard boxes in nearby stores. Instead of getting full-moving services from your professional mover, you can just rent a truck and ask friends to help you with packing. Hiring a professional mover during the off-peak days is also a good idea if you are planning to save up some money!

These are the things you should know in order to deduct moving expenses. Hopefully, you will find this article useful. Have a good move and best of luck!

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