Learn About Tax Benefits for Moving

Understanding Moving Expense Deductions

The IRS allows certain taxpayers to deduct moving expenses when they relocate for work. This deduction has specific rules about what counts as a moving expense and who can claim it. Understanding these rules helps you determine which of your moving costs may reduce your taxable income.

Moving expenses that may be deductible include the cost of transporting household goods and personal effects to your new home, lodging during the move, and travel to your new location. The IRS does not allow deductions for meals during the move, even if you're traveling a long distance. Real estate commissions, mortgage fees, and utility connection charges also cannot be deducted as moving expenses.

As of 2024, the rules for moving expense deductions apply primarily to active duty military members. For most civilian workers, the Tax Cuts and Jobs Act of 2017 suspended moving expense deductions through 2025. This means most employees cannot claim these deductions on their federal tax returns during this period. However, military personnel on active duty can still deduct reasonable moving expenses when they move due to military orders.

The IRS defines "reasonable" moving expenses as costs that are ordinary and necessary for your move. For example, if you hire professional movers, that expense is typically considered reasonable. If you rent a truck and move yourself, that rental cost may also qualify. Storage costs for your belongings during the move can be deductible if they are temporary and directly related to your relocation.

One important detail: you must move to a new job location, not simply relocate to a different city for personal reasons. The move must be work-related to potentially qualify for any deduction consideration.

Practical takeaway: Review whether you fall into a category that may allow moving expense deductions—primarily active duty military members. Keep receipts for all moving-related expenses in case the tax rules change or if you believe your situation warrants further review with a tax professional.

Moving Deductions for Military Members

Active duty military personnel receive special treatment under the tax code regarding moving expenses. Unlike most civilians, military members can deduct moving costs when they receive orders to relocate. This benefit recognizes the frequent moves required by military service and the associated costs that service members bear.

Military members can deduct reasonable expenses for transporting household goods, temporary lodging during the move, and travel to the new duty station. If a spouse or dependent family member travels separately to the new location, those travel costs may also be deductible. The key requirement is that the move must result from military orders, not a voluntary personal decision.

The IRS allows military members to deduct expenses for temporary lodging lasting up to 30 consecutive days near the new duty station. This covers hotel costs while waiting for housing to become available. If you need to store household goods while waiting to move into permanent housing, that storage cost is also deductible for military relocations.

Military members should keep detailed records of all moving expenses. This includes receipts from moving companies, hotel bills, travel expense records, and any other costs directly tied to the relocation. The military typically reimburses moving expenses, but some costs may exceed reimbursement amounts. Documenting everything allows you to determine what portion, if any, you paid out of pocket and might deduct.

Reserve and National Guard members called to active duty also may deduct moving expenses. The critical factor is whether the move occurs because of military orders, not because of personal preference. If you move to be closer to a military base but did not receive orders to do so, that move would not qualify for the same deduction consideration.

Practical takeaway: If you are on active duty and have received orders to move, organize all receipts and documents related to your relocation. Consult with a military tax specialist or review IRS Publication 3 to understand which specific expenses may be deductible for your situation.

How the Distance Test Works

Before the suspension of civilian moving expense deductions, the IRS required that a move satisfy a "distance test" to potentially qualify for deduction consideration. While this test currently does not apply to most civilian workers, understanding it provides background on how the IRS evaluates work-related moves. The distance test may become relevant again if tax laws change.

The distance test required that your new job location be at least 50 miles farther from your former home than your previous job location was. For example, if your old job was 10 miles from your home and your new job is 65 miles away, the move satisfies the distance test because 65 minus 10 equals 55 miles, which exceeds the 50-mile threshold. This test aimed to distinguish between moves that were truly work-related and those that were coincidental to a job change.

The IRS also previously required a "time test," meaning you worked for at least 39 weeks during the 12-month period following your arrival in the new location. This test ensured that people were not deducting moving expenses for temporary assignments. These tests were designed to prevent abuse of the moving expense deduction by verifying that the move was genuinely connected to stable employment at the new location.

Military members are not subject to the distance test or time test. Their moves qualify because they receive military orders, which serves as sufficient proof that the relocation is work-related and necessary. This is one significant way military moving deductions differ from civilian deductions.

If you are considering a move for work and want to understand these tests for future reference or in case tax laws change, calculating the distance between your current job location and your new job location is the first step. Using mapping tools or GPS distance calculators can help you determine whether a hypothetical move would meet the distance threshold.

Practical takeaway: Measure the distance between your old job location and new job location to understand how the distance test works. While this may not apply to your current situation, keeping this information helps you prepare if moving expense deductions become available again for civilians.

Expenses That May and May Not Be Deductible

Understanding which moving costs the IRS considers deductible and which it does not is essential for accurate record-keeping. Even though the deduction is currently suspended for most civilians, learning this distinction prepares you for potential future changes and helps military members identify their deductible expenses.

Expenses that may typically be deductible include:

• Professional moving company fees for transporting household goods
• Rental truck or container costs for a self-move
• Packing materials and labor to pack your items
• Travel to the new location for you and family members (airfare, gas, tolls, lodging)
• Temporary lodging near the new location while searching for permanent housing
• Storage of household goods during the move
• Connecting and disconnecting utilities at the old home

Expenses that are typically not deductible include:

• Meals and restaurant costs during travel
• Mortgage payments, property taxes, or rent at either location
• Real estate agent commissions or closing costs for buying or selling property
• Utility deposits or connection fees
• House hunting trips before you received the job offer
• Childcare costs during the move
• Pet transportation fees (though this may vary—consult tax guidance)
• Improvements or repairs to your new home

The distinction often comes down to whether the expense is directly necessary for the physical transportation of your household to the new location. Costs that you would incur regardless of moving, or costs related to establishing yourself in the new location beyond the move itself, typically do not qualify.

The IRS uses the term "reasonable" when evaluating moving expenses. This means the costs should be typical for the type of move you are making. Extravagant hotel stays, expensive meals, or premium transportation choices might be questioned if audited.

Practical takeaway: Create two lists of your moving expenses—one for costs that may be deductible and one for costs that are not. This organization helps you prepare your tax records and understand your actual out-of-pocket moving expenses.

Documentation and Record-Keeping Strategies