It’s that time of year again. The time when all Americans collectively cringe at the thought of having to do their taxes. Suddenly, you have to decide if you want to take the standard deduction or itemize your deductions.
After figuring out exactly what that means (it would be great if the IRS kept things simple), you start thinking about possible big-ticket deductions. That’s when you remember all the moving expenses you paid last year. Do any of those expenses count as deductions?
Let’s play, Is It a Tax Write Off? – Moving Edition!
Question #1 – Your business moved its headquarters 70 miles away. You don’t want to commute more than an hour each way so you decide to move. Is the cost of hiring professional movers deductible?
If you answered yes, you’re correct! If your business relocates 50 miles or more away and you move to be closer, then reasonable moving expenses are deductible. Moving services definitely fall into the reasonable expenses category.
Question #2 – You took a position at another business in town to take a step up in your career. You also decided to move at the same time. Do the packing materials and packing services count as a tax write off?
And the answer is . . . no. Because you’re still working in the same city as before the moving expenses aren’t deductible.
Question #3 – You moved to improve your job opportunities, but you worked part-time for the first six months. Can you deduct the gas and mileage that you racked up making the move?
Survey says . . . nope. The IRS puts time stipulations on moving expenses. You have to work full-time for at least 39 weeks within the first 12 months of moving for the expenses to count as deductions.
Question #4 – You paid cash for second-hand moving boxes and don’t have any form of receipt. Can you still deduct the expense on your 1040 Form?
Sorry, but if you answered yes you’re incorrect. Moving boxes do qualify as a deductible expense, but without a receipt, you’re taking a big risk. If you get audited and can’t produce proof of purchase your taxes will be adjusted and you’ll owe more money.
Question #5 – You’re in the military and received a change of station orders to a location 30 miles away. Your family decides they’d rather live in the new city so you relocate. Do your moving expenses qualify as deductions?
And the correct answer is – yes. Military members do not have the same time and distance requirements to meet like civilians do.
Generally speaking, your move has to be closely related to work for any of the moving expenses to be considered a tax write off. You then have to meet the time and distance tests to determine if the expenses truly can be counted as deductions.
Simpler Moving always makes a move easy and affordable even without deductions. Save the angst for tax season and let our team take the stress out of moving.
If you plan to make a move in Central Texas give us a call at 512-632-6448!