The Tax Cuts and Jobs Act of 2017 made it so only military members and their families can deduct moving expenses from 2018 through 2025. If you moved before 2018, parts of your moving budget might still be deductible, but the deadline is coming up fast.
So, who can claim a move on their taxes? And which moving expenses can be deducted? Here’s what you need to know.
What moving expenses are tax deductible?
The IRS has a helpful quiz that lets you see if you qualify for a deduction under the Tax Cuts and Jobs Act (TCJA) and which expenses you can deduct. This quiz walks you through multiple questions and generates a custom result at the end based on your answers. This is an easy way to see what you can deduct, but we’ve outlined some of the relevant rules below in case you prefer to see everything laid out at once.
Under the TCJA, you can only claim certain moving expenses, including:
- Travel expenses for yourself and family members traveling with you
- Moving services
- Moving supplies
- Fees incurred for turning off utilities at your previous home
- Shipping your vehicle to your new home
- Temporary lodging while you are en route to your new home
- Up to 30 days of storage for your belongings until they are delivered to your new home
- Parking fees
Some moving expenses that are not deductible under the TCJA include:
- Moving services provided by the government
- Trips that you made prior to your move for job interviews, onboarding or your housing search
- Food, meals, and snacks consumed while traveling
- Costs related to entertainment or side trips that you and your family made while traveling
- A lease for rental property
- The purchase of your new home
- Remodeling your new home
- Temporary lodging at the new location while you are waiting to move into your new home
- Costs related to traveling to your old home or location once you have moved
Qualifications to deduct moving expenses
For the current tax year, you can only legally claim a moving expense on your federal tax return if it’s military-related. Specifically, you have to fall under one of these three categories:
- You are active-duty military personnel and you made a permanent move for a change of station.
- You are the spouse or dependent of someone meeting the above qualifications.
- You are the spouse or dependent of a military member that died, was imprisoned or deserted.
However, this wasn’t always the case. Before 2018, other people could apply for moving expense deductions as long as they met certain criteria:
- Distance: The location you moved to must have generally been a minimum of 50 miles farther from your former home than your former job was. For instance, if your previous job was 20 miles from your old home and your new job site was 95 miles from your old home, then you qualify. However, you wouldn’t qualify if your new job was only 25 miles away. Exceptions to this rule existed for military members making a permanent change of status and spouses of military members that died, were imprisoned or deserted.
- Time: You generally must have started at your new job within 12 months of relocating and worked full time for at least 39 weeks over the next year. If you were self-employed, you usually must have also worked a minimum of 78 weeks during the two years following your relocation.
Active-duty military individuals who were moving to a new duty station or relocating to a retirement station did not have to meet the distance and time requirements.
The Tax Cuts and Jobs Act of 2017
The TCJA is set to expire after 2025.
The Tax Cuts and Jobs Act of 2017 made a number of important changes to income tax for individuals. Some of the more significant areas that saw change include:
- Limits for itemized deductions
- The child tax credit (CTC)
- Standard deductions
- The alternative minimum tax (AMT)
- Marginal tax rates
However, this bill also had a significant impact on who could claim deductions for moving expenses, as shown above. These changes do have an expiration date, though. After Dec. 31, 2025, the Tax Cuts and Jobs Act of 2017 will no longer be valid unless it is extended or made permanent by Congress.
Amending a return prior to 2018
While the TCJA may block most people from deducting recent moving expenses, it doesn’t apply retroactively. That means you can still potentially claim deductions for moves that took place before Jan. 1, 2018, if you amend your tax return.
The IRS allows individuals and businesses to amend their tax returns if the intent is to correct an error. Some of these corrections include:
- Changing filing status
- Changing dependents
- Correcting taxable income
- Correcting credits
- Correcting deductions
However, amended tax returns must be filed within three years of the date the original return was filed or within two years of when the taxes were paid (whichever is later). That means the deadline for filing an amended return for your 2017 taxes has likely either already passed or is coming up soon, unless you have unpaid tax debts.
In order to file an amended tax return, you must complete IRS Form 1040-X, the Amended U.S. Individual Income Tax Return. There are instructions contained within the instructions for the form that list more reasons you can amend your tax return.
You can file the amended return electronically or mail it to the address included in the form’s instructions. If you received a letter from the IRS saying you need to amend your return, you should mail it to the address on the notice.
Tips for amending a tax return
When completing the amended tax return, you may find these tips helpful:
- When completing Form 1040-X, many taxpayers suggest writing the changes on the original tax return in the margins. They then transfer the numbers to the new form.
- Know what you can and cannot amend.
- Make sure that each tax year is on a separate form.
- Wait to receive your tax refund from that year’s original return before you file the amended return.
- Use the IRS’s Where’s My Amended Return? tool.
- Processing of an amended tax return can take as long as 16 weeks.
- If you owe more taxes on your amended return, you should pay them as quickly as possible to avoid interest and penalties.
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