Moving Expenses Deduction: 2018 Updates
Tax season is almost upon us. With the passage of the Tax Cuts and Jobs Act (TCJA), you might be wondering, “can I deduct my moving expenses?” If you are an active military member who’s moving due to a permanent change of station, you’re in luck! You’re the only category who can still deduct your moving expenses. As for the rest of us, listen up! Here’s what you need to know.
Non-Military Members: What You Need to Know
You cannot deduct your moving expenses
If you relocated for work in 2018 and are preparing to file your 2018 taxes (in 2019), you can no longer deduct your moving expenses under the new tax laws. While these laws are not permanent, they will be in effect through the tax year 2025.
Your employer might still help cover costs
Even though you cannot deduct your moving expenses, your employer may reimburse you for some of your moving costs. These reimbursements will be reflected as taxable income in your W-2, so keep track of how much you spend as you move.
If this is the case, and your moving expenses are documented as taxable income, make sure that your withholdings are accurate and you’re withholding enough each paycheck. You don’t want to end up owing the IRS at the end of the year.
If you moved at the end of 2017
If you moved for your job in 2017 and your expenses were not reimbursed by your employer until 2018, you should not be taxed on the reimbursement when you file your 2018 taxes. Take note: you must not have already deducted these expenses in 2017.
Active Military Members: What You Need to Know
You can still deduct qualifying moving expenses
If you’re an active duty military member and are moving due to a military order, you can deduct certain moving expenses. That said, you cannot deduct any expenses for moving services that were provided and paid for by the government, or any expenses that were reimbursed by an allowance that you didn’t include in your income.
Here’s a partial list of items you can deduct:
Professional moving companies
Storage while in transit
A hotel along the way
If you use your own vehicle, you can deduct gas, parking fees, and tolls.
Here's a partial list of items you cannot deduct:
Home improvements made to sell your old home
Real estate taxes
Meals purchased as you move
Costs of applying for a new lease or breaking an old one
Loss of your security deposit
Renovations at your new home
For more details, including a full list of all deductible and nondeductible expenses, you can view the IRS 2018 instructions for deducting your moving expenses on their website.
Taxes may not be fun, but the more informed you are the better. Now that you know the new details of who can and cannot deduct moving expenses for the 2018 tax year, you can confidently file your taxes without worry. Happy filing!