Are Moving Expenses Tax Deductible: An Ultimate Guide

Are Moving Expenses Tax Deductible: An Ultimate Guide

Published: 15 Dec, 2022

Last Updated: 20 Jun, 2023

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As your moving time approaches, you may find yourself overwhelmed with responsibility. Moving can feel emotionally exhausting, due to such a drastic shift in your life that many people have to prepare themselves ahead of time. The set of tasks you may have to perform can also drain you physically, hence why relocating residents often turn to the assistance of local movers. Hiring long-distance movers from a responsible, reputable company such as SEKA Moving is a valuable option by all means, especially if you’re relocating far from your original home.

Yet there is one more disadvantage that has so far remained unnamed. Let’s face it: moving isn’t always cheap. You have to think in advance about every aspect of your spendings, and how everything aligns with your budget. No wonder the thought of moving can easily leave a person stressed about many things at once, including their wallets.

If you have some moving experience, you may know a few things about moving expenses and may have found this article in curiosity to learn more and refresh your memory. However, if you have never moved in the past, your confusion and stress levels only grow. No matter the occasion, it’s best to be informed of all the advantages and disadvantages of your move beforehand, so that you can come up with a Plan B in case of disappointment. SEKA Moving has tried to relieve all your stress by providing an ultimate guide for tax deductions on moving expenses.


1. What Kind of Expense Is a Moving Expense?

First of all, you may be wondering: what qualities as a moving expense in the first place? A moving expense is considered the cost by a taxpayer related to their move, often (but not necessarily) work-related. Moving expenses can include the cost of packing and transporting goods, connecting utilities, and so on. Expenses that have no direct relation to your relocation would not be considered moving expenses.


2. What Kinds of Moving Expenses Are Tax-Deductible?

Currently, as of 2022, most moving expenses are not tax deductible: however, there is one exception to this rule.

The only chance you may qualify for tax deduction is if you are an active part of the military. Your move also has to relate to a permanent change of station, such as moving from your home to a post of duty, moving in-between posts, or moving back to your home from your last post (the latter move has a time limit of a year after ending your duty). If you qualify for any of the above, keep reading on what counts as your deductible expenses. These include, but aren’t limited to: lodging costs (minus the meals), storing and/or transporting household goods, any travel expenses related to your duty, and shipping a private vehicle.


3. What Moving Expenses Are Not Tax-Deductible?

As of now in 2022, most moving expenses are not tax-deductible, which means you don’t have permission to claim it on the federal tax return document. Also, non-deductible expenditures mean everything the tax authority classified as natural expenses. These expenses include but aren’t limited to: food and entertainment expenses, rent payment, clothing, and gasoline. Unfortunately, if you aren’t part of the military, you may have to seek other ways to limit your expenses other than tax deductions.

Yet know that SEKA Moving has no intention of discouraging you! There are plenty of alternatives you may want to look into if you are planning to save money on moving. This includes saving up on the services provided by moving companies, as well as a variety of helpful tips you could incorporate into your packing and unpacking routines.


4. How to Claim a Deduction for Moving Expenses?

Now that you are educated on which moving expenses are deductible, you are ready to claim your deduction! Even if you do not know yet whether you qualify for every requirement, do not stress. This is one of these tax deductions where you get to find out in the process if there is any requirement you do not meet.

There are a few steps you’ll need to take in order to claim a deduction for moving expenses, which will take some calculations! Ensure first that you have the IRS Form 3903 and Form W-2 – and you’re ready to get started! Without further ado, here are the necessary steps you need to take.

  1. Calculate Deductible Moving Expenses

    The first step would be to determine the total cost of your moving expenses. We recommend making two lists instead of one. The first category is the total cost of storing and transporting your items. The second is the total cost of travel for your households (the cost of meals is excluded from this total).

  2. Complete the IRS Form 3903

    We’re moving on to the next step: the IRS Form 3903, which can easily be found and accessed online. This form already has the instructions you will need, however, we will briefly go over some of them. Fill out the lines 1 and 2 with the total of your travel costs. The sum of these costs gives you the answer for line 3.

    Next, locate box 12 on your W-2 form (be careful to not confuse the two forms!), which shows the government’s payment of your moving expenses, and fill out line 4 of your 3903 with that same number. Be aware that you only get to deduct some moving expenses if the number of your total moving expenses is higher than the number in box 12!

  3. Make Sure the Completed IRS Form 3903 Is Attached to Your 1040

    Your final- last but not least! – step is to attach the completed IRS form to Form 1040. Thoroughly go over the forms one last time and make sure you have completed everything accurately. Once you have done that, you are ready to submit the forms to the IRS. We recommend keeping copies of the forms, so you have all the required proof of your deduction later.


5. Moving Deduction Example

Among examples of a moving deduction would be this scenario. You are in the military, have now completed your duty, and are moving back home from the last post where you have served. It has been less than a year since the completion of your military duty. It is extra important to check that you qualify for all of the details of the requirement. For instance, if it has been more than a year, you may no longer qualify for a tax deduction.

SEKA Moving wishes you an affordable, safe voyage, and hopes that reading this ultimate guide helped you prepare yourself furthermore!

  Frequently asked questions on Moving Expenses being Tax Deductible

Frequently Asked Questions (FAQs)

What Form Do I Need to Use to Deduct Moving Expenses?

In order to deduct moving expenses, you will need to use Form 3903. It is a form created by the Internal Revenue Service, aka the IRS, and could easily be accessed on the website. A lot of the information related to moving expenses could be found on the website and on the form.


What Are the Moving Expenses Deduction Limits?

Even if you do serve in the military, therefore qualifying for the moving expenses, there are some limitations, according to which you may not be able to deduct expenses. An example of such would be your move not relating to your post. The only situations which qualify are either moving from your home to a post, moving from post to post, or moving from your last post back home (the latter also has to happen within an acceptable time frame).


What Is the Relocation Tax Deduction?

Relocation tax deduction refers to deducting taxes related to relocating. Such expenses include real estate, moving household goods, short-term housing, etc. You have the right to deduct unreimbursed expenses not only for you but also for your dependents or your spouse. You have to meet the time and distance requirements in order to qualify for the relocation tax deduction.


Are Moving Expenses Tax Deductible for Retirees?

The IRS mainly extends its deduction rules onto people who meet certain working conditions. Nonetheless, there are still some aspects retirees can qualify for. For instance, if you are permanently retired, have worked and lived abroad, and are only now moving to the US, you may be provided some moving expenses. You may also qualify if you are a spouse of a deceased individual who passed away outside of the US, as long as you move from their home to a home in the US within six months of their death. Sometimes, people can qualify as permanently retired, which can be determined upon factors such as your age and health status. This means that from now on, you will still be considered permanently retired even if you choose to return to work.


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