How to Get a Tax Benefit from Moving

July 8, 2014 | By: TaxCure Staff

moving tax benefitsThe last few weeks have been rather busy for me. Among other things (and there have been a lot of things), my husband landed a job on the other side of the country. So we’re packing up and moving out.

I moved across the country nine years ago, and I remember how expensive it was then. I can only assume costs are higher now, thanks to inflation and the fact that, as a family, we have more stuff. So, while moving is going to hurt, at least there is a little tax benefit in it for me to help sort of offset the cost.

Getting Rid of Your Stuff: Yard Sale vs. Charitable Donation

I’m really not sure a yard sale is a way to go for the stuff we don’t want to keep. Yes, it means a little bit of cash in hand. However, when you sell stuff at a garage sale, you end up taking whatever people give you. This means that you often end up getting less than market value for your items.

Instead, you can save the hassle by just donating your stuff to an IRS-approved charity. You can deduct the current market value of the item (you can’t deduct what you originally paid). Just make sure to get a receipt.
You should realize that you can’t deduct losses when you don’t get back what you paid for personal items. So the yard sale isn’t going to result in a tax deduction. If for some reason, though, you end up getting more for your items than you originally paid, Uncle Sam still expects you to report that as a capital gain and pay taxes on it. The same thing applies when you sell items online before you move.

Deduct Moving Expenses

Even though we plan to leave a lot of our stuff behind, we still have quite a bit to move. The good news is that we can deduct some of our moving costs. We are moving due to my husband’s work, and we are definitely moving to a location that is at least 50 miles from our current location (by close to 2,000 miles). You can’t deduct moving expenses if you move for personal reasons, though. This is a nice deduction because it’s “above the line,” meaning that it contributes to lowering your AGI.
There are some things you can’t deduct, though. While you can deduct the cost of movers, you can’t deduct the cost of the meals you buy while on the road. Additionally, if your new employer reimburses you for a portion of the move, you can’t deduct that amount. My husband’s new employer is offering $3,000 to help him relocate. That means that we can only deduct the moving expenses that exceed that amount.

If you decide to deduct expenses related to moving, be sure to double-check the eligibility with a tax professional, and keep good records so that you can back up your claims in the event of an audit.

It’s nice to know that moving won’t be a complete wash. It’s an exciting time for us, and it will be nice to be able to get some tax deductions out of the deal.