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Are Moving Expenses Tax Deductible?

Are Moving Expenses Tax Deductible?

It won’t be long before April 18th arrives and with it the deadline to file your taxes. That’s right friends, we’re in the middle of the 2022 tax season! While this time of year is looked forward to by many, for others there’s less excitement and more anxiousness and frustration. If you’ve found yourself in the latter group and are wondering if you can deduct your moving expenses related to a 2021 relocation on your Alabama and federal tax return, we have the answer.

Before we dive in with an answer, we’d like to emphasize we are not tax experts and you should ALWAYS defer to your accountant or tax professional. Now, getting back to the answer that you’re probably do not want to hear or are going to like. As a result of the Tax Cuts and Jobs Act that went into effect on January 1, 2018, the exclusion/deduction for qualified moving expenses has been suspended until 2026. That means you cannot deduct any expenses associated with a move you made last year.

There may be a caveat for active members of the Armed Forces on active duty and, due to a military order, moved because of a permanent change of station.

What about the moving allowances paid by businesses?

If your company provided you with an allowance for moving expenses, the amount will be included on your W-2 as they are not tax-free monies. There are some situations where employers issue funds prior to the employee’s start date and as a result, taxes are not taken at all.  Make sure you understand how you received your moving allowance and whether or not taxes were taken.

Have other tax-related questions?

As we mentioned above, we are not tax pros and this blog post should not be considered expert advice. Instead, we encourage you to reach out your trusted tax advisor. You can also check out these tax tips from the IRS.

We’re not tax pros but we can help you with your next move

At Changing Spaces Moving, Inc., we are a locally owned and family-operated moving company operating in the Greater Birmingham and Huntsville metros. If you’re looking for dependable movers that offer competitive pricing and five-star service, make the easiest decision of your move and book with us!