How to Claim Your Moving Expenses Tax Deduction in 2022

At some point in your life, you may need to relocate for work, and we all know that moving is expensive. Though the Tax Cuts and Jobs Act (TCJA) has eliminated the moving expense deductions for most taxpayers, you can still claim a certain deduction for relocating, storage, and travel expenses.

Here’s all you need to know about the moving expenses tax deduction, its requirements, and how to claim this deduction in 2022. 

What is the moving expenses tax deduction?

According to the IRS’s definition, moving expenses are costs incurred by a taxpayer related to relocating for work or being transferred to a new location. Moving expenses are considered adjustments to income. So, you can deduct these expenses even if you don’t itemize your deductions.

The moving expenses tax deduction covers the reasonable costs of moving your personal belongings and household items to the new location, such as:

  • The expenses for yourself and other members of your household to travel to the new location
  • The cost of oil, gasoline, parking fees, and highway tolls when traveling to the new location with your personal vehicle
  • Airline and train tickets costs
  • You can even deduct the cost of renting a storage unit for up to 30 days if you cannot move into your new house immediately after leaving your former house.

The Tax Cuts and Jobs Act of 2017 abolished the deduction of moving expenses for tax years 2018 through 2025, except for members of the military on active duty who relocate due to a military order. If you’re a member of the US army, you can file Form 3903 to claim moving expenses as federal income tax deductions. 

However, you can still claim your moving expenses deduction if your move is work-related and passes the time and distance tests.

You might also be interested in: 

What are the requirements for claiming your moving expenses tax deduction?

To be qualified for the moving expenses tax deduction, you must pass one of these tests:

Distance test 

The moving expenses tax deduction does not apply to costs incurred for relocation within the same town. Your new job must be at least 50 miles away from your old home. If your previous commute was five miles one way, the distance between your new job location and your old home must be at least 55 miles. The IRS requires you to employ the shortest commutable paths between two places when determining whether you meet the distance requirement.

Time test 

You must work as a full-time employee for a minimum period of 39 weeks during the initial 12-month period starting on the day you arrive in the new location. You can still meet this requirement even if the 39 weeks are not consecutive and you work for different employers. The IRS does not specify how many days or hours you must work per week to be considered a full-time employee; instead, it depends on your industry’s commonly-accepted standard.

How to claim your moving expenses tax deduction in 2022

Moving expenses are one of the few tax deductions that you can claim before knowing if you meet the requirements. Because of the 12-month time limit, most taxpayers will not be able to pass the time test until the next tax year. However, the IRS allows taxpayers to claim the moving expenses tax deduction in the year that they relocate.

To claim the deduction, you must list all of your relocation expenses on Form 3903 and attach it to your personal tax return for the year in which you relocated. If you didn’t meet all requirements by the end of the 12-month period, you must reverse the deduction. You can either file the original deduction amount in “other income” on your next tax return or modify the original form to exclude the moving expenses tax deduction from the tax calculation.

The bottom line

We understand that moving is expensive. However, with a good understanding of the state moving expense deductions that you’re still eligible for, you can make the best out of your deductions, and use allowed strategies to lower your taxes.

If you’d like to discover more helpful tax-related knowledge, don’t forget to subscribe to the Shoeboxed blog

Shoeboxed is a receipt management application that turns your receipts and business documents into a digital format in just one click by taking a picture straight from your smartphone or scanning a pdf. It automatically extracts, categorizes, and human-verifies important data from your receipts so that you can go over and check your records anytime with ease. Shoeboxed ensures you will always have your receipts securely stored and ready for tax purposes.

Access your Shoeboxed account from your web browser or smartphone app. Stay audit-ready with Shoeboxed for FREE now!

Tax Tip: Moving Expenses Related to a New Job May Be Tax Deductible

Internal Revenue Service Tax Tips on Shoeboxed Blog

Did you recently move to another city for a new job or because your old job is now at a new location? A tax break may be coming your way.

How far you moved and the amount of time you spend on the job will have a major impact on whether you qualify for the tax break. Moves that are only short hops and jobs that are short-term or part-time generally do not qualify. However, if you can satisfy the distance and time tests then job-related moving expenses that you incur may be tax deductible.

You will meet the distance test if your new workplace is at least 50 miles further from your former home than your previous workplace was from that home. For example, if your old job was 5 miles from your former home, your new job must be at least 55 miles from that home.

The time test requires you work full-time for at least 39 weeks during the 12 months immediately after your move. If you are self-employed, the time test requires you to work full-time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after your move. You can deduct your moving expenses on your tax return even though you have not met the time test by the date your return is due if you expect to meet the 39-week or the 78-week test as required.

Members of the armed forces do not have to meet these tests if the move was due to a permanent change of station.

Reasonable moving expenses are deductible and include the costs of moving your household goods and personal effects to your new home. You can also deduct the expenses of traveling to your new home, including lodging costs.

Meals eaten while in transit between your old and new homes are not deductible as moving expenses. No part of the purchase price of your new home may be deducted as a moving expense. You cannot claim a moving expense deduction for expenses covered by reimbursements excluded from income.

Additional information on moving expenses, including an extensive list of deductible and non-deductible expenses, can be found in Publication 521, Moving Expenses, on the IRS Web site at IRS.gov or by calling 800-TAX-FORM (800-829-3676).