For many years, Americans who moved from one location to another could deduct from their taxes various costs associated with the trip - as long as the move was primarily focused on changing jobs. This opportunity for savings allowed many to eventually save money on their trip - whether within the same state or across the country - by reducing their tax burden.
Unfortunately, a change in the relevant regulations means that the costs of moving to a new place to start or advance a career can no longer be written off. A major exception remains for the nation's military, which is important to keep in mind for those moving from one permanent post of duty to another, or starting or ending their careers in one of the five branches. However, those not in the armed services are out of luck when it comes to tax savings.
Let's look at some specifics around the suspension of tax breaks for work-related moves, then review other ways you can still save money on your next move.
How long is the moving expenses deduction out of play? Will it ever come back?
The Internal Revenue Service made it clear that the moving expenses deduction isn't gone forever, but suspended from 2018-2025. While that's a long time to wait, it's a small piece of good news to keep in mind. Similarly, reimbursement of moving expenses can no longer be excluded when calculating gross income for income taxes across the same time period. Once 2026 rolls around - or, potentially, the current tax laws are revised again - these benefits could once again become available.
While federal taxes no longer offer any financial relief to anyone moving for work except members of the military, it's important to note that this isn't necessarily the case for state taxes. Depending on where you live and where you plan to move, you may be able to recoup some savings on the state tax level.
With this one type of potential savings in mind, let's look at ways you can spend less on and otherwise recoup costs for your move even though the federal moving expenses deduction is no longer in play.
How can you save on your move in 2019 and beyond
- There are a number of money-saving strategies to consider before you move. One of the simplest is to make sure you get your deposits back on everything from your apartment if you rent. Similarly, if you'll switch to new utility companies after the move, make sure you get any deposits back from your old ones. In a worst-case scenario, you won't have to pay more to put down new deposits. In the best circumstances, you'll have cash to put toward the costs of the move. We have more tips for saving money before you move to your new home here.
- Planning ahead is one of the most frequently repeated pieces of advice for a move. If you schedule your movers and packers as soon as you are able, you avoid having to scramble to find movers, and potentially pay more, at the last minute. This also gives you more time to gather quotes and compare costs.
- Hold a yard sale before you move and you can save your money in two ways: You bring in extra cash and reduce the number and total weight of belongings your movers have to transport.
- You may find opportunities for long-term savings in your new home, too. You could be able to improve or replace insulation, windows and doors to better trap hot or cold air and reduce related costs, depending on the season. Regularly changing air filters in your HVAC system can also save money on the price of operation.
To find a dependable, reliable mover that can help you get to your new home, get in touch with your local Atlas agent today!