What Moving Expenses Are Deductible?
Moving can be a stressful process, but at least you can take advantage of some tax deductions for your moving expenses. The IRS allows you to deduct certain costs associated with moving from your taxes. This can be a great way to save some money on your taxes. In order to deduct your moving expenses, the move must be related to the start of a new job or a change in employment. There are certain requirements that must be met in order for the move to qualify for the deduction.
What Expenses Are Deductible?
In order to qualify for the moving expense deduction, you must be able to prove that the move was related to a new job or change in employment. The IRS allows you to deduct certain expenses related to the move, such as the cost of packing and shipping your belongings, storage fees, and the cost of transportation. You can also deduct the cost of lodging and meals while on the road. In addition to these expenses, you can also deduct certain expenses related to the sale of your home, such as real estate commissions and legal fees.
What Expenses Are Not Deductible?
Not all moving expenses are deductible. The IRS does not allow you to deduct the cost of meals or lodging for family members who accompany you on the move. You also cannot deduct the cost of meals for yourself while on the road, or any expenses related to the purchase of a new home. Additionally, you cannot deduct the cost of any improvements you make to your new home or any moving-related expenses that are reimbursed by your employer.
How Do I Claim the Deduction?
In order to take advantage of the moving expense deduction, you must itemize your deductions on your tax return. To do this, you must fill out Form 3903 and attach it to your tax return. On this form, you will enter the total amount of your moving expenses and any reimbursements you received from your employer. You must also include a copy of any receipts or documents that support your claim.
What Are the Limitations?
The IRS limits the amount of moving expenses you can deduct. The amount you can deduct is based on the distance between your old home and your new job. The IRS limits the deduction to the amount it would cost to move your belongings a certain distance. The limit for 2020 is $18,000 for moves over 50 miles. If your move is over 50 miles, you can deduct all of your moving expenses up to this limit.
Do I Need to File a Special Form?
In order to claim the moving expense deduction, you must file Form 3903 with your tax return. You should also include any supporting documents or receipts that you have. Additionally, if you received any reimbursements from your employer, you must include a copy of the reimbursement with your return.
What If I Don't Meet the Requirements?
If you don't meet the requirements for the moving expense deduction, you may still be able to take advantage of some other deductions. The IRS allows you to deduct certain expenses related to job search and education. You can also deduct certain expenses related to the sale of your home, such as real estate commissions and legal fees.
Conclusion
Moving can be a stressful process, but at least you can take advantage of some tax deductions for your moving expenses. The IRS allows you to deduct certain costs associated with moving from your taxes. In order to deduct your moving expenses, the move must be related to the start of a new job or a change in employment. You must also fill out Form 3903 and attach it to your tax return. The amount you can deduct is based on the distance between your old home and your new job. If you don't meet the requirements for the moving expense deduction, you may still be able to take advantage of some other deductions.
