Tax Reform Eliminates Deduction for Moving Expenses

October 24, 2018 : Brittany Benson – The Tax Institute

Editor’s Note: This article was originally published on February 2, 2018.

 

Under the old tax law, taxpayers could deduct the reasonable costs of moving household goods and personal effects, along with the travel costs of moving to the new home (excluding meals) if they qualified. With the tax reform bill passed at the end of 2017, the deduction for moving expenses is no longer available for most taxpayers.

Before Tax Reform Moving Expense Deduction Rules

Prior to the passage of the Tax Cuts and Jobs Act (TCJA), you could qualify for the moving expense deduction if:

  • Your employer did not pay or reimburse the moving costs and exclude the payment or reimbursement from your income.
  • Your new work location was a certain distance from your former home (varies by circumstance).
  • You must have worked a minimum amount of time in the first one or two years after your move, depending on your employment status. Special rules applied to members of the armed services.

Who’s Affected by Tax Reform Moving Expense Deduction Changes Starting in 2018?

The only exception to the suspension of the moving expenses deduction after tax reform is for taxpayers who are members of the military on active duty who move pursuant to a military order.

The change goes into effect for all other taxpayers for tax years beginning after December 31, 2017, through December 31, 2025, unless additional legislation is passed. This means, unless you are an active duty member of the military, you will not be able to deduct moving expenses starting in tax year 2018. However, if you moved in 2017 and you were reimbursed by your employer in 2018, you will not be taxed on the reimbursement.

Looking for Help Understanding Tax Reform?

The Tax Cuts and Jobs Act includes hundreds of changes that affect nearly every taxpayer. You can learn more about how these changes could impact you in our Tax Reform Center. If you’re looking for personal assistance, schedule an appointment with your nearest H&R Block tax professional.

Related Topics

Avatar

Brittany Benson – The Tax Institute

Related Resources

IRS Notice CP32A – Call Us to Request Your Refund Check

Received an IRS CP32A notice? Learn more about notice CP32A and how to address it with help from the tax experts at H&R Block.

Avoiding the Underpayment Penalty for Quarterly Estimated Tax Payments

Paying quarterly estimated tax payments can be confusing and you could be faced with a underpayment penalty. Learn more on how to plan ahead from H&R Block.

Understanding the ITIN Renewal Process

There’s a new IRS process for those who have an expired ITIN. Learn how to renew your ITIN number with instructions from the experts at H&R Block.

What Does It Mean to be Audited?

Get the facts about IRS audits. Learn more about the types of IRS audits and the process of being audited from the tax experts at H&R Block.