Home / Categories / Planning Your Move / What moving expenses are tax deductible?

What moving expenses are tax deductible?

April 24th, 2019 - 2:31 PM

How the new tax reform affects moving expense deductions 

If you’ve recently moved for work (or are planning to), you’re probably hoping to deduct all of those expenses on your income taxes. But with new laws in place, you may not be able to. On Dec. 31, 2017, Congress passed the Tax Cuts and Jobs Act, which prevents the majority of individuals and businesses from claiming moving expenses. However, there are some exceptions. Keep reading to learn more about the new reform, who the exemptions apply to, and what it means for long distance moves. 

moving expenses and tax deductions

What the new tax reform says about moving expenses 

Previously, you could deduct specific moving costs if the relocation was work-related. But beginning in the 2018 tax year (the taxes you file in 2019), you’ll no longer be able to withhold these expenses. On top of that, any reimbursement from your employer will be taxable.  

This change went into effect December 31, 2017, and will last through December 31, 2025 — unless Congress passes additional legislation. Which means if you moved for work in 2018 (or will be relocating in the next six years), you can’t claim those expenses. However, if you moved in 2017 and your employer provided compensation in 2018, you won’t have to pay taxes on that money.  

Exceptions 

Two exceptions exist for the new reform. These include U.S. citizens who are: 

Filing back taxes for 2017 

Still in the process of filing for 2017 (or before)? You can still claim moving expenses, but there are a few requirements to meet. Use this Internal Revenue Service (IRS) resource to see if you qualify.  

Active duty military members

According to the IRS, military members can still deduct moving expenses if: 

  • They are active duty 
  • They’re relocating because of a permanent change of station 
  • The government doesn’t reimburse them  

So what does all of this mean? 

Because moving expenses are no longer tax deductible — at least until 2026 — it’s a good idea to keep moving costs low upfront. Fortunately, there are many ways to do this! Check out this cheapest way to move guide for more details.

Questions? 

For specific tax-related questions or questions about how the Tax Cuts and Jobs Act applies to your situation, we recommend calling a tax advisor, visiting a local IRS office, or contacting the IRS at 1-800-829-1040. 

Have questions about how U-Pack helps keep moving costs low? Leave a comment below. We’re here to help!