Are Moving Expenses Tax Deductible? Not for Most Americans
Moving expenses used to be tax-deductible for most Americans. What has changed about moving expenses and tax deductions?
Oct. 25 2022, Published 2:59 p.m. ET
If you change your residence frequently, especially due to a change in employment, you likely want to save money on every part of that possible. Typical moving costs can reach into the thousands of dollars, including the cost of movers, moving trucks, mileage, and more.
Are moving expenses tax deductible in 2022? The rules have changed some over the years — keep reading to find out more.
Are moving expenses tax deductible?
The cost to rent a truck like this for your move may be one of the largest expenses.
Unfortunately, for most people, the expenses related to a move are not tax-deductible. As TurboTax explains, moving expenses for non-military individuals aren't tax-deductible for at least the 2018–2025 tax years.
Moving expenses were tax deductible prior to 2018.
When did the moving expense tax deduction change?
In 2017, the Tax Cuts and Jobs Act changed the rules about deductions for moving expenses. This meant that “income for moving expenses reimbursed or paid by an employer” would now be taxable income.
After that change, the only people who are likely eligible for a tax deduction of moving expenses are active-duty military members. If you’re a member of the U.S. Armed Forces who has had to move due to a military-ordered permanent change of station, that tax deduction is still in place.
Active-duty military members should attach Form 3903 to Form 1040 when filing taxes if using the moving deduction.
Some people might still qualify for a tax deduction on work-related moving costs.
Although the tax regulations have changed, non-military individuals who moved before 2018 and didn't claim a tax deduction on moving expenses may be able to file an amended tax return.
If your employer reimbursed you for work-related moving expenses prior to Jan. 1, 2018, but you didn't deduct that from your 2017 income, you may amend your return.
What counts as a reasonable moving expense?
As TurboTax notes, in order to deduct an amount as a moving expense, it must be both reasonable and necessary to your move. Again, this only applies to active military members currently. Here are some of the most common reasonable moving expenses:
Gas, or mileage on your vehicle
Rental trucks
Short-term storage
Packing/hiring a moving company
Insurance
Cost of hotel for long-distance move
Meals during a long trip to relocate aren't tax-deductible, although hotel costs can be.
Should you deduct mileage or actual transportation costs?
You might deduct the standard mileage rate of $0.18 per mile for January through June 2022 and $0.22 per mile for July through December. However, you can also keep track of actual moving expenses and see if that amount exceeds the mileage rate (especially considering how high gas prices are today).
You should factor in gas, oil, parking fees, and tolls for a moving trip.
Time and distance tests are used when deducting moving expenses.
The time test and distance test are used to determine eligibility for a moving-expense tax deduction. According to TurboTax, your move must happen close to a new job’s start date and be a minimum number of miles from your old workplace.
Time test: You must start a new job and work full-time at least 39 weeks within the first 12 months of moving. However, there are exceptions in cases when one spouse remains in the old residence to receive medical treatment or other special circumstances.
Distance test: Your new workplace must be at least 50 miles from your old home than your old workplace.