What You Should Know About the Moving Expense Deduction

What You Should Know About the Moving Expense Deduction

Moving isn’t just stressful. It’s also expensive, especially if you need to move to another city or state.

One of the most common reasons that people move is because of work. That leads many people to wonder, “Do I qualify for the moving expense deduction?”

The moving expense deduction allows you to pay fewer taxes for the fiscal year of your move. It can seem like a pretty great way to lower the financial burden of your move.

Is it all it’s cracked up to be? Will your move qualify you for tax deductions? Read on to find out.

Who Qualifies For a Moving Expense Deduction in 2021

Once upon a time, it may have been a little easier for employees to qualify for a tax deduction after a work-related move. Thanks to the Tax Cuts and Jobs Act of 2017, this is no longer the case. In a lot of ways, this act benefits most workers come tax season, but it did change the moving expense deduction.

According to the act, moving expense tax deductions are suspended until at least 2026. That is, unless you’re active duty military and you’re moving because you’ve been reassigned.

Some states, such as Massachusetts, still offer moving tax deductions from state taxes. Federal deductions, however, won’t be back on the table until at least 2026.

How Can You Mitigate Some of Your Moving Costs?

If you can’t get a tax deduction for your move, how can you protect your finances and mitigate some of your moving costs? We have a few suggestions.

Pick Your Movers Wisely

Movers can make your move far less stressful but that stress relief does come at a price. Compare movers to make sure that you’re not overpaying for the moving services you need.

Use Recycled Materials For Packing

It’s easy enough to head to a hardware store and pick up packing materials like boxes, bubble wrap, and packing paper. The problem is that these items are usually overpriced, especially when you consider that you’re going to throw them all away.

Instead, try to use recycled materials. Grocery stores often have plenty of extra boxes that they’ll let you have for free. You can also stock up on recycled paper materials like newspapers, magazines, and junk mail.

Avoid Storage Units If Possible

If you don’t absolutely need to use a storage unit for any amount of time, try to avoid it. Storage units can cost quite a bit of money, even if you only use a small one for a few days. Moving your belongings directly from one home to another is ideal.

Save Money on Your Next Move This Year

If you were hoping to cut back on moving expenses by filing for a moving expense deduction, you may be out of luck. Fortunately, there are other ways that you can try to save some dough on your next big move.

Looking for ways to manage more travel expenses? Take a look around at our travel content and find helpful tips and advice.

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