tax refund form

How to Deduct Moving Expenses On Your Federal Tax Return

There are several reasons why you need to move. For example, you got a big promotion but need to leave your old home behind and move to another state. You may have been laid off and found a new job in another area that required you to move to be closer. It’s even possible that you or your active duty spouse is enlisted in the military and have a change of station. You may wonder if you can deduct moving expenses under the new Jobs Act, especially if you moved due to work. Here are some tips on moving expenses and taxes.

What Are the Current IRS Guidelines for Moving Expenses?

Everyone loves a tax deduction, and in the 2022 tax year, your federal taxes may differ from previous years, thanks to new tax deductions and some deductions that went away. Unfortunately, for most individuals, there are no deductions for moving expenses. Under the current federal tax code, the only individuals who qualify to deduct moving expenses are active military members and their spouses stationed in a new place. 

It’s important to note that there can be tax implications if you receive any employer reimbursements for your relocation for work. Under the current tax code, any reimbursements you receive from your employer are considered benefits and are subject to being taxed. Some employers keep this in mind and protect their employees by including the amount of tax in the reimbursement or withhold the taxes in your check, but not all do it this way. Therefore, you’ll want to ask your employer how they handle their relocation benefits. 

Are There Any States That Allow Moving Expense Deductions?

While the deductions for moving expenses for federal taxes are limited to those in the military who move around based on their military orders, some tax deductions are available to individuals who relocate on the state level. There are currently 18 states that allow for these deductions. However, each of these states has requirements to meet to use your moving expenses as state tax deductions. 

What to Do If You Qualify for Moving Expense Deductions?

You’ll want to do a few things if you qualify under federal or state guidelines for moving expense deductions. First, you want to document your expenses, such as mileage, travel expenses, packing material costs, moving company fees, truck or trailer rental prices, and other covered expenses. Keeping your receipts and documentation will be very important when it’s time to file your taxes. You’ll also want to be sure that you file your taxes timely and include your eligible deductions.

woman working on her tax return

Do You Have Tax-Related Moving Expense Questions?

When you’ve got questions about your moving expenses and income taxes, the best plan is to seek help from either your tax preparer, by calling the IRS customer service helpline available to taxpayers, or your state’s Department of Taxation customer service. Remember that depending on the time of year and the number of callers to the federal and state taxation offices, it may be easier and quicker to get in touch with your tax preparer.

Moved and need more space? 

You love your new home, but maybe you don’t have enough space for everything you packed. That’s where can be beneficial to help you make room for all your household goods that you haven’t organized yet. Contact our professionals today about how a storage unit can be precisely what you need to finish your move. Storing things like your Christmas tree or keepsakes can help maximize your space.

Categories Moving