How to deduct moving expenses from your taxes

How to Deduct Moving Expenses from Your Taxes

How to deduct moving expenses from your taxesIf you were required to move at least 50 miles away for work within the last tax year, you may be eligible to deduct any moving expenses not paid by your employer. That includes the cost of moving and storing your belongings as well as travel expenses. Due to 2018 tax reform, this is the last year you’ll be able to use this moving expense deduction, so be sure to take advantage of it if you meet the qualifications.

How to Qualify for Moving Expenses Deduction

In order to deduct your moving expenses from your taxes, you must meet the time and distance tests.

  • Time: Have you worked as a full-time employee in the area you moved to for at least 39 weeks during the first 12 months after you arrived in the area? If the answer is yes, you may qualify for the moving expenses deduction.

You still qualify if you’ve worked for more than one employer in the 39 weeks. However, if you’re self-employed in the area you’ve moved to, you must have worked a total of 78 weeks during the first 24 months after arriving, whether you were self-employed for the entire time or worked for multiple employers.

  • Distance: Is the distance from your old home to your new workplace at least 50 miles greater than the distance between your old home and old workplace? If the answer is yes, and you meet the time test above, you can deduct your moving expenses from your 2017 taxes.

Confused? Here’s an example: If you lived in Pittsburgh and then moved to Cleveland (about 140 miles away) to be closer to your job, worked at your Cleveland employer for 24 weeks, and then became self-employed in Cleveland for 54 weeks, you are qualified.

Here’s some good news—if you’re married, only you or your spouse needs to meet the distance and time tests. You may also qualify for an exemption to the distance and time test in the case of job loss, disability, or involuntary separation. You don’t have to meet the time or distance test if you are a member of the Armed Forces and moved due to a military order and permanent change of station.

Which moving expenses can you deduct from your 2017 taxes? Deductible expenses include:

  • DIY moving trucks or pods
  • Professional moving company services
  • Cost of hiring moving help (e.g. paying someone to load your truck)
  • Packing supplies
  • Moving insurance
  • Storage for a maximum of 30 days
  • Cost of gas and oil if you travel by car
  • Any travel expenses aside from meals for each member of your household (one trip each)

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