Service members who move due to a permanent-change-of-station move may be eligible to deduct some of their unreimbursed moving expenses from their federal income tax returns. Most moving 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 Publication 521, Moving Expenses for examples and more details.
Who is eligible?
The only people who can deduct moving expenses are active-duty military members who relocated due to PCS orders or, in some cases, their unaccompanied family members. These include orders to a first duty station and orders when separating or retiring from military service.
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What expenses can be deducted?
In general, you can deduct unreimbursed expenses directly related to the moving and storage of your household goods, and your travel from your old location to the new one. This includes expenses for the taxpayer and any member of their household.
Qualifying military moving expenses fall into two groups:
Moving household goods and personal effects:
- Packing materials
- Shipping vehicles
- The cost of moving your household goods, whether by car, container or contracted moving
- Transporting pets
Reasonable travel and lodging expenses:
- The cost of one night’s lodging at your old location if your furniture has been moved
- The cost of the first night’s lodging in your new location
- The costs of stopping and starting essential utilities
- The cost of moving household goods from another location, up to the cost of moving them from your old location
- In some cases, storage fees
To be a “reasonable” expense, the route you take, for example, must be the shortest, most direct route available from your previous home to your new one.
What expenses cannot be deducted?
The following items are not deductible:
- Temporary lodging after the first night that you arrive at your new location
- Vehicle registration
- Driver’s licenses
- Any cost of purchasing or renting a new home
- Other expenses for stopovers, side trips or pre-move-house hunting 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.
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.
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