How to Deduct Moving Expenses?
The moving process is very stressful and brings us a lot of headaches. Whether you are moving locally or preparing for a long-distance move, you will have to sort out your budget, organize, make plans and create an ultimate checklist. In order to reduce the moving stress, you will have to hire one of the best moving companies Dallas. If you are deducting costs older than 2018, you should use IRS form 3903. However, after 2018, the moving costs are deductible only for the military move and even then, under certain circumstances. Today, we will figure out how to deduct moving expenses!
Deduct Moving Expenses? – What do you need to know?
If you are making a military move and changing your place of living because your job requires it, you will be able to qualify for the IRS form 3903. Being able to qualify means that you will be able to deduct some of your moving expenses and make claims to get some of your money back. However, you should know that not all the costs are eligible for deduction. If you are a part of the military and you are paying your taxes on time, the IRS will allow deducting of the moving costs on the federal income tax return. You should also hire professional Garland movers to assist you with your relocation.
One more thing! You should know that you won’t be able to deduct your moving expenses if your employer is paying for your move completely. Let’s see now how can you qualify for the moving expenses deduction!
- What is the Time Test?
- What is the Distance Test?
- Qualifying Expenses
- Form 3903
Prepare for the Move! Hire Professionals!
As soon as you find out about the move, you should hire a professional moving company. They will assist you with your move, pack your belongings quickly and transport everything safely! If you are searching for a licensed and experienced mover, contact your Small World Moving professionals! They are an excellent choice. Every professional moving company has well-trained workers and helpful customer service. They will calculate the cost of your move in advance. However, you should hire a professional mover on the off-peak days when they are not in high demand. You might also get some discount on their moving services. Some of the moving services that professional mover provides are:
- Local and Long-distance moving
- Interstate Moving
- Commercial Moving
- Storage and Packing Services
- Green Crates Rental
- White-Glove Delivery
What is the Time Test?
The time test is one of the things you will have to pass in order to qualify for the moving expenses deduction. That means that the time of your move and the start of your new job have to be closely related. If you want to meet the standards for the moving expenses tax deduction, you will have to find a job and work for at least 39 weeks within the first year after the move. It has to be a full-time job also.
There are also some special circumstances where you can deduct your moving expenses for a long time after you started working. Examples:
- If your spouse couldn’t move with you because of their health issues
- Your kids will be able to finish school at their old home
However, if you are moving by yourself, without your family, you will definitely need a guide to unpack everything properly. If you know how to unpack efficiently after moving, you will save some time and reduce stress.
Deduct Moving Expenses by Passing the Distance Test!
Another test that you will have to pass is the distance test. If you want to qualify for the distance test and deduct your moving expenses, your new working place will have to be at least 50 miles away from your old home than your old office place. Let’s see this on one example, shall we? Let’s say your previous job was 20 miles away from your old home, then your new work has to be at least 70 miles away from your old home. That’s how you can qualify for the moving expenses deduction.
However, if you are a military member and you are making a permanent change in your status, you will be able to deduct the moving expenses regardless of the distance or the employment requirements.
All your moving expenses should be reasonable and necessary for the move. The reasonable moving expenses are:
- Short-Term Storage
- Rental Truck
- Moving Boxes
- Mileage on your car and/or cost of gas
For the long-distance move expenses, you should include costs of the lodging and hotel/motel services. And, if we talk about eligible travel costs, they include parking fees, oil, gas, and tolls (find out more about toll roads in the United States)
In order to deduct your moving expenses, you should fill in the form 3903. This is how you should do it properly:
- Lodging and Travel Costs
- Shipping Costs
- Storage Costs
- Gas Costs
- Reimbursements from your employer (for any moving expenses)
if the total amount exceeds the expenses that came out of your pocket, you won’t be able to get the moving cost deduction.
Spending more money out of your own pocket than getting from your employer as reimbursement will make you eligible for the moving expenses cost deduction. You will be able to receive the deduction to your taxable income. What does that mean? Well, basically, if you spend more money you will be reimbursed more! But spending less money will make your deduction smaller, as well.
Since 2018 only miliary members can file in to deduct moving expenses. If you want to deduct costs older than 2018, you should fill in the form 3039. Hopefully, we have helped you realize how can you deduct your moving expenses! Have a good move and best of luck!