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Which Moving Expenses Are Deductible?
Moving costs used to be a common deduction, but the rules have changed. Understanding who can still claim them, and what to do with those costs otherwise, will save you frustration at tax time.
The current rule for most people
Under current law, most taxpayers cannot deduct moving expenses on their federal return, even when the move is for a new job. The deduction was suspended beginning in 2018. Since tax law can change, confirm the current status at irs.gov before you file.
The military exception
Members of the Armed Forces on active duty who move because of a permanent change of station can still deduct unreimbursed moving costs. Qualifying costs generally include the reasonable cost of transporting household goods and personal effects and of traveling from the old home to the new one, including lodging. See the instructions for Form 3903 for what is and is not covered.
Employer reimbursements
When an employer reimburses or pays for your move, the amount is generally treated as taxable wages for non-military employees. It may show up in your W-2. If you are negotiating a job offer that includes relocation help, ask whether the employer will increase the payment to cover the tax, and understand how it will be reported.
Other ways moving costs can matter
- Selling a home: Certain selling costs, such as agent commissions, reduce your gain on the sale of a main home, which may help if the gain exceeds the home sale exclusion.
- Business moves: If your business relocates its office or equipment, the costs of moving the business may be deductible as business expenses.
- State rules: Some states have their own treatment. Check Georgia rules at dor.georgia.gov or ask us.
Record keeping
Even if you cannot deduct the costs now, keep your moving receipts, mileage logs and employer statements in case you qualify for an exception or the law changes. Good records also help if you are asked about reimbursements.
If you are planning a move for work or a business relocation, get in touch and we will help you understand how the costs are handled.
This article is general information, not tax, legal or investment advice for your specific situation.