Are Moving Expenses Tax Deductible?

Moving is a significant financial undertaking. From transportation and storage to packing and travel costs, the expenses can add up quickly.

Many people wonder whether moving expenses are tax deductible. While tax laws have changed in recent years, some taxpayers may still qualify for deductions under specific circumstances.

Being aware of the latest tax regulations can help you plan your move efficiently and avoid unexpected costs. Whether you're relocating for work, personal reasons, or military service, it's essential to know what expenses you can and cannot deduct.

At The Mobile Storage Guy, we specialize in making relocations easier with flexible storage solutions across Southern California. If you're looking for cost-effective ways to manage your move, knowing the tax rules can help you save money and make informed decisions.

Are Moving Expenses Tax Deductible in 2025?

The Tax Cuts and Jobs Act (TCJA) took effect in 2017, and most taxpayers lost the ability to deduct moving expenses from their federal tax returns. This rule will remain in effect until at least 2026.

The only exception applies to active-duty military personnel who move due to a permanent change of station (PCS) order. They can still deduct eligible moving expenses, including transportation, storage, and lodging costs.

Moving expenses are not deductible at the federal level for everyone else, including employees, business owners, and self-employed individuals.

How Did the Tax Laws Change?

Before 2018, taxpayers who relocated for work could deduct moving expenses if they met the distance and time requirements. However, the TCJA suspended these deductions for non-military taxpayers until at least 2026.

Who Can Deduct Moving Expenses in 2025?

• Active-duty military members moving due to orders

• No deductions for employees, self-employed individuals, or business owners

• If you moved for a job, your expenses will not be deductible at the federal level. However, some states still allow deductions, which may provide some relief.

Employer Reimbursement and Tax Implications

If an employer reimburses you for moving expenses, that reimbursement is taxable unless you qualify for the military exemption.

How This Affects Your Taxes

• Employer-paid moving costs must be reported as income on your tax return

• Your taxable wages increase, potentially moving you into a higher tax bracket

• Some employers offer a tax gross-up, which covers the additional taxes on your reimbursement

If your company provides relocation assistance, check whether they include a tax gross-up in your package.

This benefit offsets the tax impact of your reimbursement, ensuring you do not pay out of pocket for the taxes on your moving costs.

State-Level Deductions: Can you Claim Moving Expenses on Taxes?

While federal law no longer allows moving expense deductions, some states still do.

States like California, New York, and Massachusetts continue to permit taxpayers to deduct moving costs on state tax returns, even if they are no longer deductible federally.

If you recently moved and want to explore potential state tax deductions, consider the following:

• Check with your state tax authority to confirm eligibility

• Discuss with a tax professional for guidance on claiming deductions

• Maintain detailed records of your moving expenses, including receipts and mileage logs

• If you qualify for a state-level deduction, it could help offset some of your relocation costs.

What Expenses Were Previously Deductible?

Although federal tax deductions for moving expenses are currently suspended, it is useful to understand what used to qualify. If deductions are reinstated in 2026, the following expenses may become eligible again:

Transportation and Travel Costs

• Gas, mileage, and oil changes for personal vehicles

• Rental trucks and trailers

• Airfare, train, or bus tickets for long-distance moves

• Shipping costs for household goods

• The IRS standard mileage rate for 2025 is 21 cents per mile for eligible moves, but this currently applies only to military personnel.

Storage Fees

• Temporary storage for up to 30 days

• Mobile storage unit rentals

• Warehouse storage for household items during the transition

Packing and Shipping Costs

• Packing supplies (boxes, tape, bubble wrap)

• Professional movers and moving company fees

• Freight shipping for large or fragile items

Temporary Lodging

• Hotel or short-term rental costs while waiting to move into a new home

• Meals are no longer deductible, even if you relocate for work

Real Estate and Lease-Related Costs

• Lease cancellation fees for a rental property

• Legal fees related to buying or selling a home

• Real estate commissions on selling a previous home

• While these expenses were deductible before 2018, they are now only applicable to military members moving due to orders.

What to Expect After 2025

The suspension of moving expense deductions is scheduled to expire in 2026. If Congress does not extend the suspension, deductions may return only for work-related moves.

If the previous rules are reinstated, taxpayers will need to meet the following requirements:

The 50-Mile Test

Your new job must be at least 50 miles farther from your old home than your previous workplace.

The 39-Week Test

You must work full-time in the new location for a minimum of 39 weeks within a year after your move.

The 78-Week Test for Business Owners

To qualify for deductions, self-employed individuals must work full-time in the new area for at least 78 weeks within 24 months.

For now, moving expenses remain non-deductible unless you qualify for the military exemption. However, staying informed on potential tax law changes can help you plan ahead.

FAQs: Moving Expense Deductions in 2025

 

Question 1: Can I deduct storage expenses when moving?

Answer: No, unless you are an active-duty military member moving due to orders.

 

Question 2: What if my employer reimburses me for moving expenses?

Answer: Employer-paid moving costs are taxable income unless you qualify for the military exemption.

 

Question 3: Are moving expenses tax deductible in California?

Answer: Yes, California and some other states still allow moving expense deductions on state tax returns.

Question 4: What is the IRS mileage rate for moving in 2025?

Answer: The IRS standard mileage rate for moving is 21 cents per mile, but only military members can claim it.

Question 5: Will moving expenses become tax deductible again?

Answer: Possibly. The suspension expires after 2025, and deductions could return unless Congress extends the restrictions.

Question 6: When are moving expenses deductible?

Answer: Moving expenses are deductible only for active duty military members with a permanent change of station order. For others, deductions are suspended until at least 2026, though some states still allow them. Checking with a tax professional is recommended.

Plan Ahead with Mobile Storage

Relocating comes with many expenses, and for most people, moving costs are no longer tax-deductible under federal law.

While active duty military members can still claim deductions, others must wait until at least 2026 to see if the tax laws change. However, some states still allow deductions, making it essential to check your eligibility.

Planning ahead can help you manage moving expenses more effectively. At The Mobile Storage Guy, we provide secure, flexible mobile storage solutions to simplify your transition. Whether you need temporary storage between homes or long-term options for extra belongings, we’re here to help you stay organized and in control of your move.