List Of Deductible Moving Expenses – Updated 2019. Moving is expensive and costs continue to rise in 2019. In years past it was easy to save your moving expense receipts and write them off while you file your taxes. The Internal Revenue Service (IRS) no longer allows moving deductions on tax returns under the New Tax Reform Law of 2018.
Are you planning to move because of a job opportunity? You may want to review the latest taxation laws related to moving expenses you will incur. The previous law states that those who will move for work can deduct moving-related expenses from their total income taxes that are due in the same year. The deductibles include moving costs, travel, among others. Today, with the new and fortified tax reform, the majority of taxpayers will no longer be able to claim deductions for their moving expenses.
In 2018, the ‘Tax Cuts and Jobs’ act was approved and made into law. It impacts both business entities and individuals. While the new law lowers the tax rate for many people, it likewise eliminates any tax-deductible expenses for moving. As for the IRS, along with the lowering of the tax rates, a lot of the modifications in the law that can potentially impact you and your family include increasing the standard deductions, increasing child tax credits, limiting or discontinuing certain deductions, and suspending any personal exemptions.
The many tax reform changes can take effect on tax returns filed later on this 2019. To brush up on the many ins and outs of the brand new tax law and how it will impact those who are planning to moving, we compiled and simplified IRS-approved moving deductibles for you.
The Allowed IRS Moving Deductions Before Tax Reforms
Before the Tax Cuts and Jobs act, a lot of taxpayers who were moving from one job location to another were able to claim moving expense deductions on their taxes. IRS, for their part, allowed moving deductions only when the individual is moving for job-related reasons and nothing else. The requirements for identifying the move as work-related are as follows:
The distance requirement
To prove your move is 100% work related, the commute from the old residence to the brand new job location must have a distance of at least fifty (50) miles longer than the old commute he or she used to make.
The time requirement
The taxpayer had to be doing the work for full-time at his or her place of employment for a period of at least 39 weeks or almost 10 months within the first year of moving.
If you have complied with the above prerequisites, you can successfully deduct a certain amount of moving expenses from your income taxes. But, again, these moving expenses must be all necessary for your move.
Before The New Tax Law Of 2018 Here Is A Complete List Of Deductible Moving Expenses:
- Expenses incurred for hiring professional movers and packers
- Expenses incurred for moving supplies like boxes, crates, etc
- Expenses for moving truck rental
- Expenses incurred for insurance for moving
- Expenses incurred for moving your car
- The expenses for incurred for disconnecting and connecting certain utilities.
- Expenses incurred for gasoline, toll fees, parking fees, and other transportation-related expenses that pertain to the moving
- Expenses incurred for temporary lodging, which is needed as you move to new work
- Expenses incurred for the storage of personal belongings that can last up to 30 consecutive days after moving
On the other hand, here are the items that are not allowed to be included as moving expenses:
- The cost of purchasing or renting a new home
- The expenses incurred for meals and food while traveling on the road
- The expenses incurred for looking for a new house or any pre-move visits
- Any other expenses that were already reimbursed by the employer
For more items that are not deductible, you can refer to the IRS official website online.
Calculating And Computing Moving Expenses – How They Are Reported
The moving expenses are only deductible as an adjustment to the overall gross income. Typically, to support any claim for deduction of this kind, you must use the IRS or Internal Revenue Service Form 3903. The category or classification and amount of each moving expenses should be detailed there. But, there are circumstances where other forms must be used, so you would have had to consult with a representative of the IRS or a reputable tax advisor to ensure that you are indeed using the right kind of forms.
If you happened to have received any reimbursement from your employer for your move-related expenses, that kind of reimbursement likely to had some tax implications for you. You would have had to ensure that you sat down and discussed these implications with your supervisor and your trusted tax advisor. Your supervisor must have given you the necessary information regarding the method of reimbursement that you could use and what specific records you will further need, which relates to the said reimbursement.
The Internal Revenue Service No Longer Allows Moving Deductions Under The New Tax Reform Law Of 2018
Sadly, moving expenses will no longer be treated as ‘tax deductible’ in the new Tax Reform Law of 2018 as per the Internal Revenue Service, the moving expense deduction will be suspended, this is in line with the brand new Tax Cuts and Jobs act.
Moreover, the Internal Revenue Service expressly mandates that employers must include moving expense reimbursement with the employee’s wages as taxable income. This is due to the new law – Tax Cuts and Jobs act does away with the old exclusion from income of qualified moving expense reimbursements away from the employer.
US Armed Forces Workers Are Exempt
Although many taxpayers will lose their benefits, those that work for the US armed forces are an exception to the rule. The law expressly directs that the military personnel and any member of the US armed forces who are on active duty following an existing military order that pertains to a permanent station re-assignment expenses would qualify as a deduction will not be qualified as the moving deduction will be reimbursed by the government.
What Does The New Law Mean To Those Who Intend To Move in 2019 and Beyond?
Unless you belong to the US military, you will no longer be allowed to deduct your moving expenses from your federal income taxes if you plan to move this year or the following year.
Will My Employer Nevertheless Reimburse Me for Moving Expenses I Incur As A Result of Work?
Whether you landed a brand new job or you are simply being transferred to a brand new office far away from home, it is your responsibility at all times to ask and clear with your employer whether or not they intend to cover all or a part of the moving expenses. If the answer is yes, then which ones are covered? The more specific, the better. You wouldn’t want to unwittingly absorb an expense that expected your company to shoulder. Get it in writing, if possible. Companies usually provide a relocation package for their employees so as to encourage them to take on the job. Be sure to ask your company’s Human Resource personnel for all the pertinent information regarding your moving, especially expense reimbursements. Moving is costly, even if it is partly covered by your company. Be diligent in looking for cost-cutting measures.
If I don’t have tax deductions, how can I effectively save money as I move?
To help you transition as smoothly as possible, and to make sure you don’t spend more than you have to, we compiled the top ways to cut costs as you move:
Look for free moving boxes to store your belongings. Ask around at stores, big box merchants, local libraries, and at recycling hubs.
You can check online for some coupons and moving discounts. Search deep discounts and best deals for your moving needs from moving boxes, supplies, and other utilities. This can surely save you money as you move.
Try to do it yourself instead of using professional movers. Sadly, professional movers are not that cheap. To cut back on expenses and if you don’t have a lot of bulky furniture that you will be taking with you, you can just rent a truck or any moving container. You can ask for help from family and close friends to pack, load, and unload.
Find a less expensive moving date. Timing matters because everything tends to be more expensive during peak season and weekends. Try less busy months like late fall or the cold winter months, you will surely save more from truck rentals and professional movers this way. The demand for movers is always low on mid-month or mid-week days so you can expect costs to be much lower at these times.
Donate or try to sell unimportant items before you move. This is very basic, the more stuff you have, the more expensive your move will be. That’s why it is crucial to get rid of all your unnecessary possessions before your big move. From donating or selling old clothes, electronics, household items, and what-not, you get to earn money and cut the cost of moving to your new home. Donate your old clothes to Goodwill, or you can conduct a garage sale to dispose of items that are still in good condition but that you don’t want to bring.
Lastly, given that moving expenses are no longer tax deductible at this point, you may want to reconsider ways you can save money as you move. Look for a reputable moving company that will help you with your moving and that will surely match your budget and other needs. Some relocation companies offer packages that are certified licensed and insured, so your move can be hassle-free and stress-free. Good luck on your new home and your new chapter!