Prepared by Worldwide ERC® Tax Counsel, Peter K. Scott
Peter Scott Associates
Current as of January, 2018
Note that the moving expense deduction was repealed for 2018 through 2025 in the tax reform act of 2017. Therefore, the moving expense items notes below are available for the last time on 2017 returns filed in 2018.
Here are several items deductible as moving expenses that are sometimes overlooked:
- Tips to the moving van driver or helpers.
- Mileage for driving second or third cars to the new location (in addition to the first car). The deduction for 2017 is 17 cents per mile.
- Lodging expenses in the departure location for one night after the household goods are packed, and one night in the new location on the day of arrival.
- Moving household goods from a location other than your main home, up to what it would have cost to move them from the main home
- Storage of household goods for up to 30 days, including the cost of moving the goods into and out of storage. Note that the costs for moving the goods into and out of storage remain deductible even if the goods are in storage more than 30 days.
- Expenses not reimbursed by your employer, such as extra crating, shipment of unusual items, tips to van line staff, etc.
And remember: You don’t have to itemize to deduct moving expenses.
Other filing season tips:
- If the seller of your new house agreed to pay part of your mortgage points instead of reducing the sales price, IRS says you can deduct those points, even though the seller paid them.
- If you ever refinanced your mortgage, don’t forget to deduct the entire remaining balance of points paid on the refinancing in the year you sell your home.
- If your new job is for a different employer, and you earned a total of more than $127,200 in 2017, you may have had too much deducted as contributions to Social Security. You can take a credit for the excess over $7,886 on line 71 of your Form 1040 tax return. However, you may still owe the additional 0.9% Medicare tax that went into effect in 2013 if combined wages from both employers exceeded $200,000, or if your wages combined with those of your spouse exceeded $250,000. In such a case, you will need to file Form 8959 to report the additional tax, which applies to amounts in excess of the thresholds above, and include it on line 62 of the Form 1040.
- If you moved to one of the states with state and local sales taxes but no general income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming) you may benefit from an itemized deduction for state sales taxes. The deduction was reauthorized and made permanent by Congress in 2016. (Note that beginning in tax year 2018 the total deduction for sales tax, property tax, and income tax cannot exceed $10,000.)
The 2017 return will be due on Tuesday, April, 17, 2018. The normal April 15 filing date falls on a Sunday, which originally would move the filling deadline to Monday April 16. However, that day is Emancipation Day in the District of Columbia, a legal holiday. Therefore, the filing deadline moves to Tuesday, April 17.