Life Events

A move touches your finances in more ways than the moving truck. A little planning can reduce costs, avoid surprises at tax time and keep your paperwork in order.

Are moving expenses deductible?

For most taxpayers, moving expenses are not currently deductible; the federal deduction has been limited to certain members of the armed forces moving under military orders. Rules can change, so check irs.gov or ask us. If your employer reimburses you, ask how the payment will be reported on your pay records, since it may be taxable income.

What should I budget for besides the move itself?

Think about security deposits, utility connection fees, overlapping rent or mortgage payments, travel, temporary housing, storage and the cost of replacing items that do not make the trip. Build in a cushion, because moves almost always cost more than the first estimate.

How does moving to a different state affect my taxes?

You generally owe tax to the state where you live, and to any state where you earn income. In the year you move, you may need to file part-year resident returns in both states. States differ on income tax, property tax and sales tax, so compare the full picture, not just the income tax rate. If you are leaving or arriving in Georgia, see the Georgia Department of Revenue or ask our office.

Who do I need to notify?

Update your address with the IRS, your state tax agency, the Social Security Administration, your employer, banks, credit card companies, insurers, investment accounts and the post office. Missed notices from a tax agency can lead to penalties, so do not skip this step. Instructions for notifying the IRS are on irs.gov.

What records should I keep?

Keep closing statements and receipts for permanent improvements from the home you are leaving, since they affect your basis when you sell. Keep the same records for the new home. A simple folder, paper or digital, saves hours later.

Should I review my insurance and withholding?

Yes. A new home or state can change your insurance needs, and a new job or state can change how much tax should be withheld from your paycheck. Updating your Form W-4 or state equivalent after a move can prevent a surprise balance due.

If a move is on your horizon, contact us to talk through the tax and budgeting details.