How to Claim Moving Expenses as Tax Deductions
Though it might not be your first thought, there are a lot of things that taxes and moving have in common. They’re both annoying, inconvenient, and expensive to do all by yourself. However, as we all know, neither process has to be particularly arduous or expensive for you, especially if you’re hiring the right professionals for the job.
For taxes, you might have a professional tax person or accountant do them for you to save yourself the trouble. For moving, you have Arpin Van Lines to make the process simple and easy for you.
However, taxes and moving merge when it comes to writing off moving expenses as a tax dedication. Can it be done? Absolutely. If you’re looking for ways to save on your move, or get money back from your moving budget, there’s no better way to do so than getting a great tax return.
What Moving Expenses are Tax Deductible?
So how do you write a move off as a tax deduction? It might sound like a tedious and sketchy process, but we assure you it’s not if you have the right people with you. Though not all expenses can be written off, there are several ways or situations where your moving expenses can be written off for a tax credit. Here’s how it all works.
How to Know if Your Move is Tax Deductible
- Relocating for Professional Reasons
If you moved this year for work or as a part of your work (if your company moved office or transferred to you another location, for example). These sorts of professional moves are eligible for a tax deduction. Additionally, if you move to start a new business, this is also a tax write off.
However, nothing’s that simple! There are two tests involved in qualifying for a tax credit with a work-related move.
- Time Test
To qualify for a moving tax write-off for professional relocation reasons, you have to be a full-time employee who has worked at your place of business for at least 39 weeks during the first 12 months right after you arrive in your job’s new location.
The exception to this test is if you start your jobs before your family moves due to special or unforeseen circumstances, you can write-off your expenses even if you move way after your first day of work.
- Distance Test
Another test to see if you qualify for a tax write-off is the Distance Test. This entails that your new job must be at least 50 miles+ farther away from your previous job location than your past home was. If your workplace didn’t have a physical location, your new job has to have been over 50 miles from your previous home.
If you or a member of your family is a part of the armed forces, and you all move due to a permanent change of station, you are exempt from the previously stipulated parameters. However, you can only deduct certain expenses from your military-related move.
These costs include:
- Packing expenses
- Transportation expenses
- Storage expenses
- Insurance expenses
- Utility expenses to disconnect and reconnect in your old and new homes
The tax write-off allowed for moving expenses in 2021 is 16 cents/mile (not including parking expenses or tolls).
- General Costs
If you’re moving yourself, you can generally deduct the general costs that go along with moving you and your family (as well as your belongings). These expenses include:
- Moving company services (including Arpin Van Lines)
- Do-it-yourself moving costs (including self-rental trucks or pods)
- Gas expenses (at the aforementioned standard mileage rate)
- Packing supply costs
- Moving insurance costs
- Moving help (if paying people to help load and unload your moving truck)
- Travel expenses for one trip (not including meals)
- Storage expenses (for up to 30 days after the move)
What Cannot be Deducted
If you’re wondering what you can’t deduct from your move, or what you shouldn’t attempt to, we’ve got you covered in those aspects too.
What Moving Costs Cannot be Written Off for Tax Credits
- Meal Costs
You cannot deduct the costs of meals during your journey to your new home, or after you reach your destination.
- House Hunting Costs
You cannot deduct the costs of your house search prior to or after moving. You also can’t deduct the cost of breaking your lease, selling your home, or signing your new lease or housing contract.
- Lodging Costs
You can deduct the cost of lodging for 1 day if you have to stay elsewhere while in your moving process, but nothing more than that.
- Employer-Covered Costs
You cannot deduct costs your employer either reimburses you for, or pays for in your stead. You should also research or ask your tax company the proper questions to make sure you aren’t taxed for the reimbursements your employer provides you with.
Once You’ve Moved
After you’ve already moved in, there are other important matters to take care of as well. Taxes and tax write-offs might be the last thing on your mind as you try to settle into your new home, but it’s important to take care of these things with both the IRS and your state so that your taxes are all in the right order and are being taken out appropriately.
- Update your address with the IRS.
When you move, you have to update your address with a lot of different institutions. One of the most important to update your information with is the IRS. This is important as well if you’re expecting any correspondence from them, or if you get your refunds by mail.
- Update Your Address with Your Company
To make sure your tax information is correct and that the right money is taken out for various different kinds of federal, state, and whatever other unique taxes your city or town might have. You should’ve contacted your company to let them know of this change prior to your transition so that they can update it as soon as it takes effect.
Additionally, if your company is the reason for your relocation, or if they are relocating as well, they should have all of this information to make sure they and you are in good standing with the IRS. If you don’t update this information, it can really mess up your tax process, and cause unnecessary deductions to be made (or for you to have excessive amounts taken out come tax season).
How Do I Know What Forms to Use to Deduct Moving Expenses?
As we all know, the IRS has a lot of different (and sometimes complicated) forms for various changes in your life. So which forms need to be filled out to deduct your moving expenses? We’ve got everything you need to know.
Your employer should update your information on their end so that you’re all up to date in their system, and that proper taxes are taken out of your paycheck from the start. However, there are other forms to fill out in order to properly claim moving expenses on your taxes.
For military personnel who are claiming their moving expenses on their taxes, they’ll need to fill out form 3903 as an attachment to the regular form 1040.
For most people, if doing your taxes through services like TurboTax, or automated systems that allow you to do your taxes on your own, you will receive a prompt or question regarding whether or not you moved throughout the year.
From there, you’ll be run through various questions regarding your moving status, and the appropriate expenses will be written off. Additionally, if using a professional, in-person service like H&R Block or an accounting service, they will also prompt you regarding your move to fill in the proper information.
For complete information, the IRS has further information on their website here.
How Else Can I Save on My Move?
Even if you can’t write off all (or any) of your moving expenses, there are plenty of ways to save money on your upcoming move. What kind of savings? Well, by starting with hiring Arpin Van Lines are your movers, you’ll already have the savings rolling in.
Not only does Arpin offer the best competitive pricing on the market, as well as working with you to make sure your move is as customized as possible, we also provide a wide array of services that will get you where you need to go quickly and for the lowest price possible.
Whether you’re looking to move across the street, across the country, or across the world, Arpin has the capabilities and expertise to make sure your move is handled professionally and efficiently.
Even if you can’t write off your moving expenses, you’ll be secure and excited for your move when you use our services. For over 100 years, Arpin has provided our customers with amazing savings and an amazing moving experience all around. As a family owned and operated business, we know that no move is the same – and no client is the same. With Arpin, you’re getting the best experience and the best prices possible! Contact us today.
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