How to deduct moving expenses?

Relocation can be very stressful. You need to think and take care of a lot of things. First of all, although there are a lot of best moving companies in Florida – you really need the best! You need to hire a company that will help you with your relocation in every aspect. But as you know, every relocation costs. And often – it is not very cheap. So, naturally, you are wondering is there any way to deduct moving expenses? If you are unsure about this subject, we have this simple guide that will help you to determine what qualifies for the deduction, and what you can do to save as much as possible.

What do you need to know if you want to deduct moving expenses?

First of all, you should know that if you are trying to get a deduction for relocations prior to 2018 you need to file a Form 3039 to IRS. Military relocations can be deducted, but even then only under certain circumstances. But, the good news is that some of the moving costs are tax-deductable if your relocation is work-related. The Internal Revenue Service has two requirements when it comes to deducting moving expenses and those are:

  • Distance Test
  • Time Test
calculator and pen for deduct moving expenses?
You can deduct moving expenses, but you need yo know which and how

What is the Time Test?

So, this is one of the things that you will need to pass in order to qualify to deduct moving expenses. Simply put, this means that your move and the start time of your new job have to be closely related. The first and main requirement is that you have 39 weeks of full-time employment for one year after the relocation. You can work for different employers, these 39 weeks don’t have to be in the same company.

You can search for a job, or you can get transferred by your company. Both of these situations can be taken into consideration when it comes to deducting your moving expenses. There are some cases when you can deduct moving costs a long time after you relocated. One of the situations is if your spouse is not able to move due to health issues and the other if your kids need to finish school. But if you are moving by yourself make sure to plan everything on time and make sure to get packing services in case you need them since there is a tight time frame.

What is the Distance Test?

This is a second test that you will have to pass in order to deduct moving expenses. If you want to qualify, your new working place has to be at least 50 miles away from your old home than your old office. For example, if your previous job was 20 miles from your home then your new work has to be at least 70 miles away from your old home. But, there is an exception and in case you are a military member and you are making a permanent change in your status – you will be able to deduct the moving expenses no matter the distance. Make sure to hire only reliable interstate moving companies Florida so you can get all the receipts and any additional help you might need. 

empty road
Distance Test is important when it comes to deduction

How to know what are deductible moving expenses?

So, as you probably know not all of the moving expenses are deductible. But you need to keep receipts either way since you need to have proof about all of your expenses. We know that this can be an additional problem and a task but if you want to deduct moving expenses – you need to save the bills. Some of the reasonable moving expenses that can be deducted are:

  • Short-term Storage
  • Rental truck
  • Moving boxes
  • Mileage on your car and/or cost fo the gas

These are just some main guidelines that you should keep in mind if you want to get cost deducted. If you plan to use the storage, keep in mind that this is only for short term storage. If you plan to store belongings for a long period of time – you won’t get reimbursed for that.

Moving and packing

Naturally, you will get a deduction for packing and moving your household. But, as we mentioned you need to make sure to keep the receipts. And, to make sure that you get all of them you need to do proper research on moving companies. You need to make sure that you are hiring a reliable moving company, that can maybe even help you along the way with the deduction. Although it seems strange, you can get a deduction even for every moving box that you purchased. So we can not stress enough how important is to keep the receipts.

moving boxes
If you save receipt you can get a deduction for every moving box

Also, you can get your pet relocation deducted. Shipping cars, motorcycles and other costs that are associated with the vehicle – you can add them to the list as well. Also, if you are moving long-distance you can deduct moving expenses like transportations and lodging costs for you and your family form your old home to your new home. Just make sure to keep all receipts organized and you will be good to go.

What are the non-deductable costs?

So, as you probably know there are some things that simply can not be under the list of “Deduct moving expenses ” in your plan. Some of the things that you will pay from your pocket are meals during travel. Also, it is important to mention that you won’t be able to get moving expenses deducted if they were previously reimbursed by your employer. Also, things that are related to the costs of buying your new home, security deposit and similar.

Keep in mind that all the organization and preparation for the relocation, while you are unemployed, are not tax-deductible. If you decide to use eco-friendly packaging for your relocation, but you are not employed- that won’t get deducted. Keep in mind that you can always check with your moving company about details since they have a lot of experience.

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