Can I deduct moving expenses?

September, 03 2019 by Steve Banner, EA, MBA

Up until the start of the 2018 tax year, some taxpayers who relocated to a new principal place of work could get a tax deduction for the cost of their moving expenses. Some rules applied, for example the taxpayer’s move must have been for a distance more than 50 miles from their previous place of work. But taxpayers who met the tests were able to deduct many of their moving expenses from their taxable income.

However, as part of the tax reform that took place in late 2017, the moving expense deduction was eliminated for all tax years from 2018 through to 2025. But this does not apply to taxpayers who are members of the Armed Forces. From 2018 onwards, the deduction can be claimed by active duty service personnel who are ordered by the military to move to a new permanent station.

Armed Forces members who qualify for the deduction can deduct reasonable expenses of moving themselves, as well as members of their household, such as a spouse and dependent. This generally includes expenses for moving their household goods and personal effects. They can also claim certain travel expenses related to their move. However, they cannot claim any of their moving expenses that were paid for directly by the government or that were reimbursed later.

Members of the Armed Forces who are ordered to relocate permanently should keep good records of all the expenses they paid related to their move. This will help them claim their full benefit under the moving expenses deduction.