Are you planning a move in 2023? If so, you need to know about the shocking truth regarding moving expense deductions.
The Tax Cuts and Jobs Act (TCJA) effectively eliminated this deduction for most taxpayers from 2018 through 2025. That means the vast majority of Americans can no longer deduct their moving expenses on their federal tax returns for the 2023 tax year.
However, there is one exception to this rule. Active-duty members of the U.S. Armed Forces who relocate due to a military order can still claim this deduction. If your relocation is due to a permanent change of station, you can still deduct your moving expenses using IRS Form 3903.
Some states, such as California, continue to provide a moving expense deduction on state tax returns if you qualify. To be eligible, you must satisfy specific criteria set by the IRS, including the distance test and the time test.
The distance test requires that your new workplace should be at least 50 miles farther from your old residence than the previous job. The time test stipulates that you should work full-time for at least 39 weeks during the first 12 months after the move.
If you meet these requirements, you may be able to deduct expenses such as the cost of moving your household goods and personal effects, as well as travel expenses for you and your family. However, it’s important to note that the deduction is limited to the amount of your income for the year.
So, if you’re planning a move in 2023, it’s crucial to understand the tax implications. For most people, the moving expense deduction is no longer an option. However, if you’re an active-duty member of the military or meet the specific criteria set by your state, you may still be able to claim this deduction.
It’s always best to consult with a tax professional to ensure that you’re taking advantage of all the deductions and credits available to you. They can help you navigate the complex tax laws and ensure that you’re maximizing your refund.
In conclusion, the moving expense deduction is no longer a viable option for most taxpayers in 2023. However, if you’re an active-duty member of the military or meet specific criteria set by your state, you may still be able to claim this deduction. Be sure to consult with a tax professional to ensure that you’re taking advantage of all the deductions and credits available to you.
