Life comes at you fast, and sometimes that means having to pick up and move across the country for work. If your employer doesn’t reimburse you, there’s no moving tax credit, but there is a deduction that you can claim if you’re eligible. If so, you can include costs like moving all of your belongings and traveling from your old home to your new home, but you can not include the cost of any meals along the way.
TL;DR (Too Long; Didn't Read)
The moving expense deduction is an adjustment to income, so if you are eligible to claim it, you can write off your moving expenses and still claim the standard deduction.
Moving Expenses Allowed as Adjustment to Income
If your move is closely related to work, such as starting a new job or relocating to a new office, and you meet the distance and time tests, you can claim both the moving expenses deduction and the standard deduction. The IRS classifies the moving expenses deduction as an adjustment to income, which means you don’t have to itemize to claim the deduction.
Moving Expenses Deduction Eligibility
To be eligible to claim the moving expenses deduction, you must meet the distance test and the time test. The distance test requires that your new job be located at least 50 miles farther from your old home than your old job. For example, if you drove 13 miles from home to your old job, your new job must be at least 63 miles away from your old home. The time test requires that you work full time at least 39 weeks during the first year after your move. If you’re self-employed, you must also work full time at least 78 weeks during the first two years after you move.
In addition, if your employer reimburses any of your moving expenses, you’re not allowed to deduct that portion of your expenses. For example, if your total moving expenses are $2,400, but your employer reimburses you for $1,500, you can only deduct $900 on your tax return.
Moving Expenses Disallowed in 2018
Beginning with the 2018 tax year, the deduction for moving expenses has been repealed. Therefore, you’re not allowed to claim moving expenses on your 2018 tax return, even if you don’t itemize your deductions and you meet all of the criteria. Under current law, the moving expenses deduction will come back into existence for the 2026 tax year unless additional changes are made.
2017 Last Year to Claim Moving Expenses
If you’re still filing your 2017 tax return, you can claim your moving expenses using Form 3903 to calculate the deduction. Then, you have to copy the amount of the deduction onto your Form 1040 tax return.
Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."