Many US citizens wonder whether they may deduct their moving costs on their annual tax return. This was one of the facilities the IRS offered until a few years ago. However, with the Tax Cuts and Jobs Act of 2017, this type of deduction was suspended.
Here is what you should know about the effects of this act and your options:
- Exemptions
The only exemption provided in the act is for military personnel and their family when they move because of orders. They are still able to deduct their moving costs.
- Area of Application
Some US states, such as Massachusetts, still allow taxpayers to deduct their moving expenses. The reason for this is that such states did not adopt any changes made to personal income tax laws made after January 1 2005.
- Looking at the Future
The Tax Cuts and Jobs Act will allow tax deductions for moving expenses after January 1 2026. However, this will happen only if the Congress does not decide to make the provision permanent.
- Work Related Moving Expenses
If you relocate your family to start a new job, your employer may offer you an amount of money to cover the moving costs. The bad news is that this amount is treated as income, thus taxable. The good news is that many employers offer more money than necessary to pay the moving expenses, to cover the added taxes.
Find great local movers at https://yourpersonalmover.net.