Moving expenses deduction – how does it work?

The new Tax Law states that from 2018, moving expenses deduction will only be available to some military personnel. However, if you have relocated in the years prior to 2018, we have some good news for you! In some cases, Federal Tax Law allows you to get a refund on certain moving expenses if your relocation was business-related. Therefore, if you have started a new job, relocated your office or started working for the same employer but on some other location, you are eligible for moving expenses deduction. Unfortunately, not all expenses are deductible, and they depend on a couple of criteria.

A person holding a pen and writing the word `tax` on a piece of paper.
If your relocation was business-related, make an effort to learn everything about moving expenses deduction.

What are the moving expenses?

By definition, moving expenses include all the costs you had for packing and shipping your items to a new location. Moreover, moving expenses also include storage fees, as well as transportation costs, such as oil and gas. Everyone knows that moving expenses can be very pricey when accumulated. Therefore, if you have moved for the purpose of your job, look into getting some of that money back. However, just like with anything else in life, be careful. There are requirements you must fulfill if you want to qualify for a deduction.

The distance requirements for moving expenses deduction

Wouldn`t it be perfect if there were no limitations, and you could get a deduction for any and every relocation? Unfortunately, that is not the way life works. There are some criteria which must be met if you are to get a deduction. And, they start with the distance traveled.

If your knowledgeable office movers NYC have relocated you in the same city, we are sorry to inform you that you will not be eligible for a deduction. The rule is that your new place of work must be 50 miles farther than your old house. Fifty miles is not a small distance, by no means. Therefore, if you think, or know, that there are 50 and more miles from your job and your last home, feel free to ask for a deduction.

Also, when measuring the mileage, the IRS will make sure you use the shortest route. They want to be sure you are doing everything by the book.

The time requirements for moving expenses deduction

Beware, because there are a lot of small restrictions here. If you do not meet even one of them, you stop being a candidate for moving cost deduction.

  • To qualify for moving expenses deduction, you must be working for at least 12 months. There is no requirement for you to work for only one employer. Thus, if the need arises, you can divide your time between a couple of them.
  • You must be a full-time worker for at least 39 weeks during that first year.
  • Luckily, there are no requirements to how many days and hours you work, as long as you fulfill the norm of your industry.

Big Apple Movers NYC advise you to check everything before you start thinking about moving cost deduction. These rules cannot be bent, and there is no way of getting around them.

A calendar which you should take a look at before applying for moving expenses deduction.
It is important to know whether you satisfy all of the requirements, before applying for moving cost deduction.

What are the deductible moving expenses?

Luckily, there is not a shortage of moving expenses that can be deducted. However, there is a difference between short distance moving and moving interstate, or even abroad. If you had a DIY move and short distance move, and you have transported your furniture by yourself, you can get a deduction for gas, oil and even highway tolls. When accumulated, these expenses can produce a significant amount of money, so it would be good to get some of that money back. On the other hand, if you had a long distance move, you could get a reimbursement for the plane tickets, and the best thing is that this deduction applies to the whole family.

Moreover, if there was a need for you to rent cheap storage NYC, you should know that you can also be deducted for these expenses, as well. However, there is a limit, since this deduction only applies to periods of up to 30 days. Therefore, if you had to use a storage unit for more than a month, you will not be able to deduct it from your moving expense.

How and when can you claim a deduction?

Moving expenses deduction is a unique one. Why is this the case? Namely, you can claim this deduction even before you are sure that you satisfy all of the requirements. However, it is not the most recommendable course of action. If at the end of those twelve months, you have failed to meet one or more requirements, you will have to return the deduction. Have in mind that most taxpayers usually fail to meet the criteria, and they have to return the money once the 12-month period ends.

To claim a deduction is easy. All you have to do is report your expenses on IRS Form 3903. Attach that form to the tax return for the year when you moved, and the process is over. If it turns out you have to return the deduction, you can do it in two ways.

  • For your next tax return, make sure to include the original amount of your moving expenses deduction.
  • Calculate your tax without including the moving cost deduction.

If you are not good with taxes, it is never a bad idea to seek professional help. The IRS will not be lenient if you make any mistakes with your taxes. Avoid trouble whenever you can!

A person holding a pen and writing in a notebook, with a calculator next to it.
People who are not good with taxes should enlist professionals for help.

If you think you could qualify for moving expenses deduction, you should give it a try. However, be careful, as you might have to return everything at the end of the year. It is advisable that you save money and look for some cheap fun in NYC. Better to be safe than sorry!