Tax Reform 101: What You Should Know About Changes to the Moving Expense Tax Deduction

Are there moving boxes in your future? Summer is a popular time to move and many are moving miles away to take a new job. If that’s you, congratulations on embarking on your new adventure!

Here are a few things you should know about moving for a new job since the new tax reform law passed:

• Beginning in tax year 2018 (the taxes you file in 2019) the cost of those boxes, the moving van, the people you pay to load and unload them and other previously tax deductible moving expenses paid out of pocket are no longer tax deductible under the new tax reform law that was passed at the end of last year.
• Your employer, however, can still reimburse you for your moving expenses.
• The new law applies to civilians, but not to military personnel who are relocating.
  • Active duty military can still deduct qualifying moving expenses if they don’t receive reimbursement from the government for the move.
  • Active military members also don’t have to pay tax on qualified moving expense reimbursements, as long as the move is to a permanent change of station due to a military order. Those moving expenses include travel and lodging to the new location for you and your family, moving household goods, and shipping cars and pets.

If you are not active duty military and your employer is paying for your move, your employer will include what it pays for your move as well as reimbursements you receive from them as income reported on your W-2. Of course, your employer won’t be withholding income taxes from that income, since there’s nothing to withhold from.

If your employer is footing the bill for your move, take into account that the amount paid by your employer and any reimbursement may increase your tax liability. You can review your withholding to see if enough is being withheld from your income when taking into consideration the additional amount being added to your income.

TurboTax W-4 Calculator can help you easily figure out your withholding allowances, whether you want to boost your tax refund or your take-home pay. Don’t worry about knowing the new tax reform law. TurboTax has you covered and will be up to date with the latest tax laws.