Can I Write Off Moving Expenses In 2018? Your Definitive Guide
Moving can be a stressful and expensive undertaking. Beyond the cost of movers, packing supplies, and temporary housing, there’s also the question of taxes. Did you have the option to write off moving expenses in 2018? Let’s delve into the specifics of the 2018 tax year, explore the rules, and determine if you could’ve gotten a tax break for your move.
Understanding the Tax Landscape: The Tax Cuts and Jobs Act of 2017
Before diving into the specifics of deducting moving expenses, it’s essential to understand the context. The Tax Cuts and Jobs Act of 2017 significantly altered the tax landscape for the 2018 tax year. This legislation brought about numerous changes, including alterations to deductions, credits, and tax brackets. These changes directly influenced whether certain expenses, like moving costs, were deductible.
The General Rule: Moving Expenses and the 2018 Tax Return
So, could you write off moving expenses in 2018? The answer, unfortunately, is largely no. The Tax Cuts and Jobs Act of 2017 eliminated the deduction for moving expenses for most taxpayers. This means that, generally, you couldn’t deduct the costs associated with moving to a new home. However, there was a significant exception, which we’ll explore next.
The Exception: Military Personnel and Moving Expense Deductions
While the general rule disallowed the moving expense deduction, there was a crucial exception: members of the Armed Forces. If you were an active-duty member of the U.S. Armed Forces, you could potentially deduct moving expenses in 2018 if the move was due to a military order and the move was to a new permanent duty station.
Military Moving Expenses: What Could Be Deducted?
For eligible military personnel, the deductible moving expenses could include a variety of costs. Here are some examples:
- Transportation Costs: This covers the expenses of moving your household goods and personal belongings. This could include the cost of hiring movers, renting a moving truck, or even the mileage if you drove your own vehicle.
- Travel Expenses: Travel costs to your new home, including the cost of lodging (but not meals) during the move.
- Storage Costs: Temporary storage costs for your household goods and personal belongings for up to 30 consecutive days.
Important Considerations for Military Personnel
Even if you were in the military, certain limitations and conditions applied. You needed to ensure that your move met the requirements, and you had to keep accurate records of all your moving expenses. You also had to meet the distance test, which is still applicable in many circumstances.
The Distance Test: What Did it Mean?
The IRS often uses a “distance test” to determine if a move qualifies for a deduction, even for the military exception. While not directly applicable for non-military taxpayers in 2018, understanding the concept helps clarify situations.
- New Workplace Distance: Your new workplace must be at least 50 miles farther from your old home than your old workplace was from your old home. In other words, the distance between your old home and your new job must be greater than the distance between your old home and your old job by at least 50 miles.
Gathering Your Records: What Documentation Was Needed?
If you were eligible to deduct moving expenses (as a military member), meticulous record-keeping was essential. Here’s a breakdown of documentation you should have collected:
- Receipts: Keep all receipts related to transportation, packing supplies, lodging, and other qualifying expenses.
- Mileage Logs: If you drove your own vehicle, maintain a detailed log of the miles driven for the move.
- Official Orders: For military personnel, keep copies of your military orders authorizing the move.
- Other Relevant Documents: Any other documentation that supports your moving expenses.
Claiming the Deduction: The Form 3903
For military personnel who met the requirements, the process involved using Form 3903, Moving Expenses. This form is used to calculate the deductible moving expenses and report them on your tax return. It’s crucial to fill out this form accurately and completely.
The Impact of the Tax Cuts and Jobs Act: A Broader Perspective
The elimination of the moving expense deduction for most taxpayers was just one of many changes brought about by the Tax Cuts and Jobs Act. The legislation aimed to simplify the tax code for some taxpayers, but it also significantly altered the landscape. It is important to be aware of the changes when filing your taxes.
Alternative Tax Breaks: Other Potential Deductions and Credits
While moving expenses were generally not deductible in 2018, there might have been other tax breaks available to you. These vary based on individual circumstances. For example:
- Home Mortgage Interest: If you bought a new home, you might have been able to deduct home mortgage interest.
- State and Local Taxes: You could have potentially deducted state and local taxes, although the amount was capped.
- Charitable Contributions: You might have been able to deduct charitable contributions.
Tax Planning for Future Moves
Even though the rules for 2018 are set, understanding the tax implications of a move is essential for future tax planning. The rules can change, so it’s always a good idea to stay informed about the latest tax laws. Consulting with a tax professional is always a smart move.
Frequently Asked Questions
What if I moved for a job but am not military?
In the tax year 2018, if you were not a member of the military, you generally could not deduct moving expenses. The Tax Cuts and Jobs Act removed this deduction for most taxpayers.
Can I deduct the cost of selling my old home as a moving expense?
No, the costs associated with selling your old home, such as real estate commissions, are generally not deductible as moving expenses.
Are meals deductible as a moving expense?
No, meals are generally not deductible as a moving expense, even for military personnel. Lodging costs, however, might be deductible.
What if I moved internationally in 2018?
The rules were the same. The general rule was that, unless you were in the military, your international moving expenses were not deductible.
How far back can I amend my 2018 tax return if I missed a deduction?
Generally, you have three years from the date you filed your 2018 return to amend it and claim a deduction or credit you missed.
Conclusion
In 2018, the ability to deduct moving expenses was significantly curtailed by the Tax Cuts and Jobs Act. While the general rule disallowed the deduction for most taxpayers, an exception remained for active-duty members of the U.S. Armed Forces. Military personnel could potentially deduct certain moving expenses, such as transportation and lodging, if the move was due to a military order. Understanding the specific rules and keeping accurate records was crucial. For those outside the military, no moving expense deduction was generally available in 2018. As tax laws evolve, staying informed and consulting with a tax professional is always the best approach to ensure you’re optimizing your tax situation.