Relocating for Work – What Can You Deduct?

Millions of Americans move each year. While relocating for work, you may incur many moving expenses. So, can you still deduct these expenses? Read on to learn more…

Members of the Armed Forces May Deduct Qualified Moving Expenses

Members of the Armed Forces on active duty may deduct unreimbursed moving expenses if they move because of a permanent change of station.

The move may be from the servicemember’s home to the first post of active duty, or from one permanent post to another, or from the last post of duty to another residence in the U.S. The last move must generally occur within one year of ending active duty in the Armed Forces.

Deductible expenses include the cost of moving household goods and personal belongings and travel to the new location. Travel includes transportation and lodging, but not meals. The cost of a concurrent move by the servicemember’s spouse and dependents, even if from or to a different location, is also deductible.

Taxpayers Who Are Not in the Armed Forces May Not Deduct Moving Expenses

Under the Tax Cuts and Jobs Act, the deduction for moving expenses is not available for non-military taxpayers for tax years 2018 to 2025. Prior to 2018, taxpayers could generally deduct moving expenses if:

  • The move was closely related to the start of work at the new location, and
  • The new work location was at least 50 miles further than the taxpayer’s previous home was from the previous work location (distance test), and
  • The taxpayer was employed at the new job at least 39 weeks during the first 12 months after the relocation (time test). The time test was 78 weeks out of 24 months for self-employed taxpayers.

Taxpayers who have unreimbursed moving expenses before 2018 and who did not previously deduct them should consider filing an amended return to do so. Amended returns may be filed for tax years 2016 (through April 15, 2020) and 2017.

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