Deducting Moving Expenses
with Form 3903

Can you really save taxes by deducting moving expenses? Read on to find out if you, too, can be eligible for the moving expense deduction.

Moving expenses are only deductible if you move because of work. Whether it is because you found a new job in a different state or your employer transferred you to a new city, or even if you open a new store in another town. As long as your move is work-related the moving expenses might be deductible.

Here are the two test that you must meet to ensure that you're deducting moving expenses correctly:

Distance test
Moving across the street or to the other side of town does not qualify you for the moving expense deduction. Your new workplace must be at least fifty miles from your old workplace (or old home if you didn't have an previous job) for you to have qualified moving expenses.

Time Test
Short term moves will not qualify either (vacation expenses are not a deductible moving expense). During the first twelve months you must work full-time in the new location for at least 39 weeks for the move to be considered permanent. If you are self-employed you must also work full time in the new location for 78 weeks of the first 24 months.

The move must also be closely related to the start of the new job. You must move not later than one year after you start the new job.

Other times that deducting moving expenses are an option:

  • Members of Armed Forces who have a permanent change of station. They do not have to meet the distance and time test.
  • Retirees who worked abroad and are permanently returning to the United States.
  • Surviving spouse and dependents of someone who died (decedent) while living abroad. The survivors must have lived in the same home as the decedent and move back to the U.S. within six months of the decedent's death.

What can be deducted?

The expenses your are deducting must be directly related to moving yourself and your family plus the household items to the new home. This includes the cost of :

  • packing and transporting your household and personal items (including storage for up to 30 days).
  • transportation from the old to the new home plus lodging expenses (but not meals). If you travel with your own car, you can either deduct the actual costs or 19 cents per mile.

What can not be deducted?

Sorry, but not everything is deductible. Although some expenses that you have are only due to your move you cannot deduct them.

  • Expenses related to buying or renting your new home or selling your old home.
  • Penalties that you incur due to the move like mortgage penalties or expenses related to breaking the lease of your old home.
  • Incidental expenses that you incur due to moving to a new state. For example new driver's license, car tags.
  • Definitely not pre-move house-hunting or refitting of carpeting or draperies.

Double deductions are not allowed. Make sure you don't include:

  • Anything that you deducted as a business expense.
  • Whatever your boss reimbursed you.

See also:

Form 3903 Deducting Moving Expenses

Publication 521

The Tax Cut & Jobs Act suspends the deduction for moving expenses for taxable years 2018 through 2025. However, this does not apply to  members of the Armed Forces (or their spouse or dependents) on active duty who move due to a military order.

All information on moving expense above applies to tax year 2017 and tax years after 2025.

Updated January 3, 2018

Tax Help Tax Deductions > Moving Expenses

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