The information in this article is up to date through tax year 2019 (taxes filed in 2020).
Moving for a new job can be expensive. The good news is that if you are itemizing deductions for years 2017 and earlier, you can deduct some of the expenses on your tax return.
However, if you moved in year 2018 or later, the Tax Cuts and Jobs Act eliminated miscellaneous itemized deductions. This includes moving expenses. If you are filing for years 2017 and prior, here are the requirements for taking the deduction.
Deducting moving expenses
Remember: this deduction was eliminated beginning in tax year 2018. It only applies to tax returns filed for 2017 and before.
In order to deduct your moving expenses, you must be able to meet all three of these requirements:
- You need to have started your new job within a year of the move.
- Your new job location must be at least 50 miles farther from your old home than your old job was from your former home.
- You must meet the time test. There are different time tests for employees and self-employed taxpayers. An employee must work full time for 39 weeks during the first 12 months after arrival. The self-employed taxpayer must work 78 weeks during the first 24 months of arrival.
If you can meet these conditions you can deduct several moving expenses, including the cost of moving your household goods and personal effects, ordinary travel expenses including lodging, the costs of connecting and disconnecting utilities, costs of shipping your car and household pets, and the cost of storing and insuring household goods.
Are you in the military? Active duty military are still eligible to deduct some of their moving expenses. Read this article for more information.