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MYTH :

You Can Deduct Moving Expenses for Any Move

moving-expenses

REALITY :

Moving expenses are only deductible for active-duty military personnel moving due to a military order.

HOW WE KNOW :

IRS guidelines outline the specific criteria for deducting moving expenses.

KEY TAKEAWAYS :

  • Limited Deduction: Moving expense deductions are currently available only for active duty military members moving due to a military order.


  • Suspended for Most Taxpayers: The Tax Cuts and Jobs Act (TCJA) of 2017 suspended the moving expense deduction for most taxpayers until 2025.


  • Stay Informed: Understanding the current rules for deducting moving expenses is crucial for accurate tax filings.

deductible moving expenses

One common tax myth is the belief that you can deduct moving expenses for any move. This misconception can lead to incorrect deductions and potential issues with the IRS. Here's what you need to know to stay compliant and avoid these pitfalls.


Origin of the Myth


  • Historical Deduction: Before 2018, many taxpayers could deduct moving expenses related to starting a new job or relocating for work.


  • Lack of Awareness: There is often confusion about the changes made by the Tax Cuts and Jobs Act (TCJA).



Reality of Deducting Moving Expenses


  • Current Law: The TCJA suspended the moving expense deduction for most taxpayers for tax years 2018 through 2025.


  • Military Exception: Only active duty members of the Armed Forces who move due to a military order can deduct moving expenses.



IRS Guidelines on Moving Expense Deductions


  • Non-Military Taxpayers: Moving expenses are not deductible for most taxpayers until 2025, per the TCJA.


  • Military Members:

  • Eligibility: Must be an active duty member of the Armed Forces.

  • Qualified Moves: The move must be due to a military order and a permanent change of station.

  • Deductible Expenses: Includes reasonable expenses for moving household goods and personal effects, and travel expenses, including lodging, but not meals.



Why the Myth Persists


  • Historical Practice: Many taxpayers remember when moving expenses were commonly deductible.


  • Anecdotal Advice: Misleading information and advice from non-professional sources perpetuate the myth.



Avoiding the Pitfall


  • Understand the Rules: Clearly understand the IRS rules for deducting moving expenses.

  • Non-Deductible: Moving expenses for most taxpayers through 2025.

  • Deductible: Moving expenses for active duty military members moving due to a military order.



What You Need to Do


  • Check Eligibility: Verify if you qualify for the moving expense deduction under current law.


  • Document Expenses: If eligible, keep detailed records of all moving-related expenses, including receipts and documentation of the move order.



Consulting a Tax Professional


  • Seek Professional Advice: Consulting a tax professional can ensure you correctly identify and claim eligible moving expense deductions if you qualify.


  • Accurate Records: A professional can help you maintain proper documentation and navigate the complexities of current tax laws regarding moving expenses.

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