The new tax law eliminated the moving expense deduction for tax years 2018 through 2025. However, during that period, it retains the deduction for members of the Armed Forces (or their spouse or dependents) on active duty that move because of a military order and incident to a permanent change of station.
For tax years beginning before 2018, if you moved due to a change in your job or business location, or because you started a new job or business, you could deduct your reasonable unreimbursed moving expenses but not any expenses for meals. You could deduct your moving expenses, if you met all three of the following requirements:
- Your move closely relates to the start of work;
- You meet the distance test; and
- You meet the time test.
If you’re a member of the Armed Forces who is on active duty and moved because of a military order, and incident to a permanent change of station, you didn’t need to satisfy the distance and time tests.
If you were working abroad or are a survivor of a decedent who was working abroad and, upon permanent retirement (or in the case of a survivor, death of the taxpayer working abroad), you move to the United States or one of its possessions, you don’t have to meet the time test.
For a detailed description of each of these requirements, see IRS Publication 521, Moving Expenses.
|For tax years beginning after December 31, 2017, you can’t deduct any moving expenses incurred in a work-related move.|
However, the law doesn’t change for members of the Armed Forces (including their spouse or dependents) on active duty that move because of a military order and incident to a permanent change of station.
How will this affect me?
Mason and Olivia moved in 2018 because Olivia started a new job in a location 100 miles farther away from home than her former job location. They incurred $5,000 in reasonable moving expenses, excluding meals, in 2018. Neither Mason nor Olivia are active members of the military. They can’t deduct their moving expenses on their 2018 tax return.
Same as above, except Olivia is on active duty in the Navy and moved pursuant an order that requires her to permanently change her station to a location 40 miles farther away from home than her former station. They are permitted to deduct their reasonable moving expenses, $5,000, on their 2018 tax return.