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Service members who move due to a permanent change of station may be eligible to deduct some of their unreimbursed moving expenses from their federal income tax returns. Many of these costs are covered by military allowances, so you’ll want to save your receipts and log your expenses to calculate any possible deduction at the end of the tax year.
Check out IRS Tax Topic 455, Moving Expenses for examples and more details.
Who is eligible?
Only active-duty military members who relocate due to PCS orders or, in some cases, their unaccompanied family members, can deduct moving expenses. These include orders to a first duty station and orders when separating or retiring from military service.
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MilTax’s tax preparation and e-filing software is available from mid-January through mid-October, and MilTax consultants are available year-round to help with your tax questions.
What expenses can be deducted?
In general, you can deduct unreimbursed expenses directly related to the moving and storage of your household goods, as well as costs (subject to approval) related to travel from your old location to a new one. This includes expenses for the taxpayer and any member of their household.
Among the costs you can deduct as part of your move are:
- Packing materials
- Shipping of vehicles
- Transporting pets
- Stopping and starting essential utilities
- Some storage fees
- One night’s lodging at your old location if your furniture has been moved
- First night’s lodging at your new location
- Moving of household goods, whether by car, container or via a moving contract
To be a reasonable travel expense, the route you take, for example, must be the shortest, most direct one available from your previous home to your new one.
What expenses cannot be deducted?
The following costs are not deductible:
- Temporary lodging after the first night that you arrive at your new location
- Vehicle registration
- Driver’s licenses
- Purchasing or renting a new home
- Other expenses for stopovers, side trips or pre-move house-hunting expenses
The IRS has a wealth of additional information to guide you on the process of deducting moving expenses.
How to report deductible expenses
Deductible moving expenses are reported on IRS Form 3903, and any deduction on that form is reported on your regular federal income tax return.
The IRS website provides additional information on the forms used to report moving expenses.
Many moving expenses are fully or partially covered by military allowances. You cannot claim any expenses paid for by the military, whether paid directly or reimbursed. For example, you cannot deduct mileage and lodging that was reimbursed under the military’s Monetary Allowance in Lieu of Transportation, typically called mileage, or the PCS Per Diem rates.
Military OneSource offers free tax assistance through the MilTax suite of services, including tax preparation, filing software and telephone consultations with a tax professional. Schedule an appointment to speak with a MilTax consultant by calling 800-342-9647. OCONUS/International? Click here for calling options. Or live chat to schedule a free consultation with a MilTax consultant or a financial counselor.