Can You Deduct Moving Expenses for a New Job?

Navigating a job-related move often raises questions about potential tax deductions. Many individuals wonder if the expenses incurred during a relocation for new employment can reduce their taxable income. Understanding current tax laws regarding moving expenses is important for anyone considering or undertaking such a move.

Who Can Deduct Moving Expenses

The ability to deduct moving expenses has undergone significant changes in recent years. The Tax Cuts and Jobs Act (TCJA) suspended the moving expense deduction for most taxpayers for tax years 2018 through 2025. This means individuals generally cannot claim this deduction on their federal income tax returns during this period.

An exception exists for active-duty members of the U.S. Armed Forces. If a move is due to a military order and constitutes a permanent change of station (PCS), these individuals may deduct their unreimbursed moving expenses. A PCS includes moves to a first active duty post, between permanent duty stations, or from a last duty station to a home upon retirement or discharge. The latter must occur within one year of ending active duty or within the period allowed by Joint Travel Regulations.

The deduction can also extend to the active-duty member’s spouse and dependents in certain circumstances. Only expenses not reimbursed by the government are eligible for deduction.

What Moving Expenses Are Deductible for Eligible Taxpayers

For eligible active-duty military personnel, specific types of expenses qualify for deduction. This includes expenses related to moving household goods and personal effects.

Deductible costs for household goods can encompass packing, crating, transporting, and insuring these items. It also covers the cost of storing household goods and personal effects for up to 30 consecutive days after they are moved from the old home and before delivery to the new home. Travel expenses for the taxpayer and their household members to the new home, such as transportation costs and lodging on the way, are also deductible.

However, certain expenses are explicitly not deductible. Meals consumed during the move are not eligible for deduction. Costs associated with house hunting trips, temporary living expenses in the new location, or expenses incurred in buying or selling a home are generally not deductible moving expenses.

How to Report Deductible Moving Expenses

Eligible taxpayers report their deductible moving expenses using IRS Form 3903, Moving Expenses. This form is designed to calculate the amount of the deduction. The calculated deduction is then reported on Form 1040, U.S. Individual Income Tax Return, as an adjustment to income on Schedule 1.

This type of deduction is considered an “above-the-line” deduction, which means it reduces your adjusted gross income (AGI) and can be claimed even if you do not itemize deductions. Maintaining meticulous records is important for substantiating these expenses. Taxpayers should retain all receipts, invoices, and mileage logs to support their claims in case of an IRS inquiry. Form 3903, its instructions, and other relevant tax publications are available on the IRS website or through tax preparation software.