Moving is an exciting step. Whatever the reason for your moving, it can help you lift the page of your life and go to the next chapter. However, moving can take a significant amount of your money. It’s especially true if you hire the best moving companies in Los Angeles. The reason for this is that you will pay the company money to help you pack and move your stuff to your new house or apartment. And if you’re preparing for tax season, you may start to question whether the expenses can be tax-deductible?
Are Moving Expenses Tax Deductible?
Moving expenses could be deducted from your returns. However, with the passing of the Tax Cuts and Jobs Act, most of you can’t subtract moving expenditures from federal taxes. Only active-duty military members can deduct moving expenses.
What If You’re Moving for an Employer?
If you move for an employer and your company has provided you with a moving allowance, then it’s considered a taxable income on your W-2. Your employer may offer a larger allowance to shoulder the tax implications. In that case, you may ask your employer for more allowance so it can be reflected as a taxable income if it’s time for you to file your tax return.
What are Moving Expenses?
If you need to tally the expenses to claim as an expense tax deduction, you need to know which expense is reasonable as necessary. So what are the necessary moving expenses?
- Rental trucks
- Moving companies
- Short-term storage
If you’re moving long-distance, you can include the cost of lodging at a hotel. However, you can’t include the expenses for meals.
How to Deduct Home Office Moving Expenses?
Amid the pandemic, working from home has become a standard. If you’re self-employed or you run your business from home, you can take advantage of a tax break. That is, you can benefit from a home office deduction. However, not every self-employed can take advantage of it.
You may qualify if a portion of your house can act as your main place of business. The home office must be a dedicated room. It doesn’t need to be a large room. A simple desk in a part of a large room will do. But you’re not allowed to use the whole room as a deduction if that room is being used for other activities. Simply put, you can claim a deduction if that room is used strictly for business.
Even though you can’t deduct your moving expenses on your returns, you can deduct your donations related to your move. For instance, if you are donating your furniture, clothing, and other stuff that won’t fit in your new home, those donations have tax benefits. But you need to keep their receipts to claim a deduction.
Should You Hire a Moving Company?
Even though you can’t deduct the expenses for using one of the best moving companies in Los Angeles, you still need to hire a moving company to ensure that your moving will be easier. To know more about the benefits of hiring us, please call us at: (888) 693-9080.