Everyone knows moving can cost a lot and it would be nice if someone could deduct some of that money from your taxes. Before 2017 it was totally possible on a federal level. But what about now?
What Changed After 2017
Before 2018 a lot of people could deduct moving expenses from their taxes. That changed when Congress passed a new law called the Tax Cuts and Jobs Act in 2017. Since then, most people cannot deduct moving expenses from their taxes. This rule will be in place until 2025.
Note: The rules might change after 2026. For now that is how it is. If you want to know what is going on with taxes after 2025 you should check the IRS website. As well as talk to a tax professional.
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Who Still Qualifies for the Federal Deduction
There is one exception to this rule. If you are in the military and you had to move because of a change of station you can still deduct some moving expenses. This includes expenses for your spouse and kids.
To qualify for this deduction, you have to have orders that say you have to move.
What Expenses Are Deductible for Military Members
If you are in the military and you can deduct moving expenses here are some things that the deduction includes. You can deduct the cost of packing, moving your stuff, cost of traveling to your home like gas and airfare, and the cost of storing your stuff for up to 30 days.
What cannot be deducted:
- Meals during your trip
- The cost of looking for a house
- The cost of breaking a lease
- The cost of buying a house
- Any expense that the government already paid for
How to Claim the Deduction (Military Members Only)
- Collect all of your receipts for moving expenses.
- Download a form from the IRS website.
- Fill out the form. Add up all of your expenses.
- Attach the form to your tax return. Report the deduction.
- Keep all of your receipts for at least three years in case you get audited.
What About State Taxes?
Some states have their rules about deducting moving expenses. Even if you are not in the military, you might be able to deduct moving expenses on your state taxes. Some states let you deduct moving expenses, if you itemize your taxes. Other states let you exclude money that your employer paid for moving expenses from your income.
You should check your state’s website. Talk to a tax professional to see what the rules are.
One thing to keep in mind is that if your employer pays for your moving expenses, you have to report that as income.
