Tax Insights

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Moving on with life, deducting moving expenses

moving, moving expenses, deduction, taxWhen you graduate from college, you never know where life is going to take you. My hopes following graduation were to move away from home and get a job in my degree. Luckily for me, I was able to make this happen. Two days after my graduation, I drove with my family from Michigan down to Arizona to start my job as a tax associate at Henry+Horne.

A trip that distance had its fair share of expenses (i.e. moving truck, gas, hotels, etc.) Being an accountant for the last few years, I knew there was a deduction for moving expenses. I was fortunate enough to move when the moving expense deduction was valid.

To qualify for the moving expense deduction in 2017 you must meet three requirements:

  • Your move is closely related to the start of work.
  • You meet the distance test –your new main job location is at least 50 miles farther from your former residence than your old main job location was.
  • You meet the time test. If you are an employee, you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location. If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you arrive in the general area of your new job location. You can, however, deduct your moving expenses before you meet the time test.

My move from Michigan to Arizona in 2017 met all three requirements, so I was able to deduct the majority of my moving expenses. The expenses that are deductible in 2017 are moving your household goods and personal effects (including in-transit or foreign-move storage expenses) and traveling (including lodging but not meals) to your new home.

Unfortunately, when the Tax Cuts and Job Act (TCJA) was signed into law this past year, the moving expense deduction was suspended. However, the deduction is still applicable for active duty military who move due to a military order.

So, when my new apartment has ants crawling through it, and the administrative staff sets off my alarm when I’m out of town, and I decide it’s time for another move, I won’t be getting the benefit of another moving expense deduction; at least not anytime soon.

KC Kolb