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Aocaoc
Level 1

What can I deduct

What can I deduct from my move? Will they accept bank statements if I don’t have receipts for everything? I moved from Texas to Wisconsin. i.e. moving truck, gas, etc. if I had to pay a fee for breaking a lease to move can I deduct that ?

2 Replies
dclick
Employee Tax Expert

What can I deduct

Thanks for reaching out to us today. Hope your move goes smoothly!

The Tax Cuts and Jobs Act of 2018 revamped how moving expenses were treated (reimbursements and payments towards these amounts as well). 

I'll first address any reimbursed expenses and then any non-reimbursed expenses.

Qualified Moving Expenses Reimbursements No Longer Excluded from Employees’ Income, with Two Exceptions

For 2018 through 2025, employers must include moving expense reimbursements in employees’ wages. The new tax law suspends the exclusion for qualified moving expense reimbursements.

Exception 1: Members of the U.S. Armed Forces can still exclude qualified moving expense reimbursements from their income if:

  • They are on active duty
  • They move pursuant to a military order and incident to a permanent change of station
  • The move expenses would qualify as a deduction if the employee didn’t get a reimbursement

Exception 2: Employers may exclude from wages any 2018 reimbursements to or payments on behalf of employees for moving expenses incurred for a move that took place prior to January 1, 2018, and which would have been deductible had they been paid prior to that date. See Notice 2018-75



So these amounts will all be included as taxable wages for the year. 

Here is an IRS Page on the topic, created to handle the transition from 2018 and before to 2018 and beyond treatment of these items:

https://www.irs.gov/newsroom/employer-update

Additionally, there is no deduction for out of pocket expenses you pay towards the move that are unreimbursed any longer. Here is a wonderful TurboTax article on the topic:

https://turbotax.intuit.com/tax-tips/jobs-and-career/guide-to-irs-form-3903-moving-expenses/L6CwmGm3...

I hope this helped, and thanks again for reaching out!

-Dennis

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mfields2
Employee Tax Expert

What can I deduct

Unless you are in the military, there is no federal tax deduction for moving expenses.  The only possible benefit would be on your state taxes as a state tax deduction.  Because there is no state income tax in Texas, there is no state tax deduction there.  Wisconsin follows the federal rules for employees, so there is no state tax deduction in Wisconsin unless you are in the military.

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