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If you’re planning a move in Alexandria or anywhere in Northern Virginia, you may be wondering if you can deduct moving expenses from your taxes. With the cost of moving adding up quickly, a tax deduction could provide welcome relief. However, recent changes to federal tax law have significantly limited who can claim moving expenses. Here’s what you need to know before you start packing and planning your budget.
In the heart of Alexandria, VA, Division 1 Movers are established experts in local and long distance moving. If you have any questions after reading this guide, please reach out.
Current Federal Tax Law on Moving Expense Deductions
Tax Cuts and Jobs Act: Major Changes Since 2018
The Tax Cuts and Jobs Act (TCJA), which took effect in 2018, made significant changes to the deductibility of moving expenses. For most taxpayers, moving expenses are no longer deductible on federal tax returns. This change is in effect for tax years 2018 through 2025.
Who Can Still Deduct Moving Expenses?
There is one major exception: active duty members of the U.S. Armed Forces who move due to a military order. If you are not an active duty military member, you generally cannot deduct moving expenses on your federal taxes.
- Active Duty Military: If you are moving because of a permanent change of station, you may still qualify for the moving expense deduction.
- All Other Taxpayers: The deduction is suspended for everyone else until at least 2026, unless Congress changes the law.
What Moving Expenses Were Previously Deductible?
Understanding the Old Rules
Before 2018, many taxpayers could deduct reasonable moving expenses related to starting a new job in a new location. These included the cost of packing, shipping, storage, and travel. The deduction was available if you met certain distance and time requirements.
- Packing and Shipping: Costs for moving household goods and personal effects.
- Travel: Transportation and lodging expenses for yourself and your family.
- Storage: Up to 30 days of storage for your belongings.
These deductions are no longer available to most taxpayers under current law.
State Tax Deductions for Moving Expenses
Does Virginia Allow Moving Expense Deductions?
Some states still allow moving expense deductions on state income tax returns, even though the federal deduction is suspended. As of the most recent tax year, Virginia does not allow a deduction for moving expenses on state tax returns. However, tax laws can change, so it’s always wise to check with a tax professional or the Virginia Department of Taxation for the latest updates.
What If You’re an Active Duty Military Member?
Special Rules for Military Moves
If you are an active duty member of the Armed Forces and your move is due to a military order, you can still deduct reasonable moving expenses. This includes the cost of moving household goods, travel, and storage. You do not need to meet the old distance or time tests, but you must be moving because of a permanent change of station.
- Qualifying Expenses: Packing, shipping, storage, and travel costs.
- How to Claim: Use IRS Form 3903 to report your moving expenses when filing your federal tax return.
How to Prepare for Tax Season When Moving
Keep Good Records
Even if you don’t qualify for a deduction, it’s a good idea to keep all receipts and documentation related to your move. If you are military or if tax laws change in the future, you’ll be prepared to claim any eligible expenses.
- Save Receipts: Keep all invoices from moving companies, storage facilities, and travel expenses.
- Document Dates and Locations: Record the dates of your move and the addresses involved.
- Consult a Tax Professional: Tax laws are complex and subject to change. A professional can help you understand your options and ensure you’re in compliance.
Frequently Asked Questions About Moving Expense Deductions
Can I deduct moving expenses for a job relocation?
No, unless you are an active duty member of the military moving due to a military order, you cannot deduct moving expenses for a job relocation on your federal or Virginia state taxes under current law.
Will the moving expense deduction return in the future?
The suspension of the moving expense deduction is set to last through 2025. Congress could choose to reinstate it, but there is no guarantee. Stay informed by checking IRS updates or consulting a tax professional.
Are there any other tax benefits for moving?
While the moving expense deduction is suspended, you may still qualify for other tax benefits related to home ownership, such as mortgage interest or property tax deductions. These are separate from moving expenses.
Let Division 1 Movers Help You Move with Confidence
While most people can no longer deduct moving expenses from their taxes, planning your move with a trusted, professional company can still save you time, money, and stress. Division 1 Movers offers reliable, efficient moving services throughout Alexandria and Northern Virginia, including full-service packing, careful handling, and expert advice every step of the way.
Have questions about moving, packing, or planning your relocation? Contact Division 1 Movers today for a free quote or to learn more about our services. We’re here to make your move as smooth and worry-free as possible!
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