Previously, taxpayers had the ability to deduct the reasonable costs of moving, along with travel costs if they qualified. An individual could claim an above-the-line deduction (non-itemized) for moving expenses if their move was work-related. As an alternative, an individual’s employer could reimburse the employee for moving expenses.
An individual was able to deduct moving expenses if:
- Their employer did not reimburse their moving costs.
- Their new work location was a certain distance away.
- They worked a minimum amount of time (this time varies for those in the military).
2018 Tax Reform
As part of 2018’s tax reform, work-related expenses have been removed for the taxable years of 2018 to 2025. The only exception is military-related moving expenses. Not only can an employee no longer deduct moving expenses, employers cannot pay or reimburse moving expenses tax-free. Employers do have the opportunity of treating payment or reimbursement as W-2 wages which they can deduct as a compensation expense.
This change goes into effect for tax years from December 31, 2017 to December 31, 2025. Those who moved in 2017 are still able to deduct moving expenses on their 2017 tax return they filed in 2018.
What You Should Do
Now that individuals can no longer deduct moving expenses from their taxes, it’s imperative to save as much money as possible during the moving process. While some might think that calls for moving yourself, hiring moving professionals often saves money.
Individuals who attempt to move themselves don’t realize the rental expenses involved—trucks, dolly carts, etc. These costs add up and could be saved with a professional moving company who come equipped. Moving companies also stick to schedules, meaning those moving will be back to work on time. They save individuals money by ensuring items arrive whole and no one is injured during the move.
If you have an upcoming work-related move, contact Dirck’s Moving and Logistics to guarantee a quality and money-saving move.