Moving Expenses Tax Deduction: Making a Military Member Moving Expense Claim

To be eligible for the moving expense deduction, you must be an active-duty military member who has received a permanent change of station (PCS) order. This includes moves from one duty station to another, as well as moves from your home to your first active-duty post or from one permanent post to another. You must also have unreimbursed moving expenses that are directly related to the move.

To qualify for the deduction, you must meet the following requirements:

• You must be an active-duty member of the armed forces.
• You must have received a PCS order.
• You must have unreimbursed moving expenses.
• The move must be to a new duty station or to a location that is closer to your new duty station.

You must utilize IRS Form 3903: Moving Expenses to report your moving costs. These are considered deductible moving expenses and can be claimed on your tax return using Form 3903. Active-duty military personnel can use this form to submit claims for their unpaid moving costs. Here is a detailed tutorial on completing Form 3903:

1. Shipping and Storage Costs: On line 1 of Form 3903, include the expenses related to transferring your personal belongings and household items, including shipping and storage charges.
2. Expenses for Travel, Accommodation, and Gas: On line 2 of Form 3903, provide the cost of transportation from your previous residence to your new one, including lodging and gas. Keep in mind that only expenses linked to hotel and transportation can be written off, not food expenses.
3. Refunds: On line 4 of Form 3903, note any refunds you received for your moving costs. This covers any employer-provided reimbursements that aren’t listed in box 1 of your W-2.
4. Excess Reimbursement: You will not be eligible to deduct your relocation expenses if the reimbursement exceeds your total out-of-pocket costs; instead, you will need to declare the excess reimbursement as taxable income.

Qualified moving expenses include the costs of moving your household goods and personal effects, as well as the costs of traveling to your new duty station. The following expenses are considered qualified moving expenses:

• Transportation costs, such as gas, tolls, and parking fees.
• Travel expenses, such as lodging and food costs.
• Storage fees for storing your household goods and personal effects.
• Insurance premiums for insuring your household goods and personal effects during the move.
• Costs of moving your household goods and personal effects, such as hiring a moving company.

Unreimbursed moving expenses are expenses that are not reimbursed by the military or any other source. To deduct unreimbursed moving expenses, you must have receipts and records to support the expenses. The following expenses are considered unreimbursed moving expenses:

• Expenses that are not reimbursed by the military or any other source.
• Expenses that are not covered by a military allowance or other benefit.
• Expenses that are not deducted as a business expense on your tax return.

Moving from your home to your initial post of active service or from one permanent post of duty to another is known as a PCS, which often involves transitioning between various duty stations. You are exempt from the time and distance requirements for civilian taxpayers if you are moving because of a PCS. This implies that you don’t have to worry about the distance between your old and new residences in order to deduct your unpaid moving costs.

When it comes to relocating costs, active-duty military personnel are entitled to various unique provisions:

• No Time or Distance Tests: Active-duty military personnel are exempt from the time and distance requirements, which are necessary for civilian taxpayers to be eligible for the relocation expense deduction. These provisions allow service members to deduct military moving expenses from their federal income tax returns when relocating due to a PCS. The unreimbursed costs of relocating your personal belongings and home items, such as trailer transportation, packing, crating, in-transit storage, and insurance, can be written off as deductible expenses.
• Travel Voucher: A large portion of the data required to calculate the deduction will be included in the travel voucher. For a military move, you can utilize the regular mileage rate, which is 22 cents per mile for 2024 (not including parking fees).

You must maintain thorough records of your expenses in order to recover your moving costs. This covers travel expenditures, shipping and storage receipts, and any other out-of-pocket moving-related charges. Any reimbursements you get should also be documented because they will have an impact on your deduction.

The military offers a variety of relocation benefits and assistance to help service members and their families with the moving process. These benefits and assistance include:

• Relocation allowances, such as the Basic Allowance for Housing (BAH) and the Cost of Living Allowance (COLA).
• Travel allowances, such as the per diem allowance and the mileage reimbursement rate.
• Storage allowances, such as the storage allowance for household goods and personal effects.
• Assistance with finding housing, such as the Military Housing Office and the Housing Referral Office.
• Assistance with moving, such as the Defense Personal Property System (DPS) and the Military Moving Company.

Time and distance tests are the primary distinction between military and civilian moving deductions. Active-duty military members who are relocating because of a PCS are exempt from these conditions, but civilian taxpayers must fulfill them in order to be eligible for the moving expense deduction.

There are a few extra deductions unique to military-related migrations in addition to the usual moving costs:

• Security Deposits: Although they can be claimed as a separate item, security deposits are not deductible as moving expenses. For instance, you can deduct the $350 security deposit you paid to your new landlord as an expense.
• Foreign Moves: You can claim a deduction for reasonable costs associated with relocating your personal belongings and household goods if you are moving from the United States to another country or from one foreign country to another. This covers storage fees, transportation costs, and other associated costs.

MilTax is a free tax preparation and e-filing service provided by the military to service members and their families. MilTax offers a variety of resources and services to help with tax preparation and filing, including:

• Free tax preparation and e-filing software.
• Access to tax consultants and experts.
• Resources and guides for tax preparation and filing.
• Assistance with tax-related issues and problems.
• Access to tax forms and publications.

If you know the IRS regulations and follow the right steps, it's easy to claim moving expenses as a service member. You may make sure you are utilizing all of your eligible deductions by completing Form 3903 and maintaining thorough records of your spending. It's important to keep in mind that active-duty military personnel are exempt from the time or distance requirements, but the majority of taxpayers are not able to claim moving expenditures. You may easily handle the process of claiming moving expenses if you adhere to our recommendations and comprehend the particular regulations and deductions that are accessible to active-duty military people. Always maintain thorough records, and get advice from a tax expert if you need it or have any questions.

For more information on how to manage your taxes, you might find it helpful to learn abouthow to file back taxesand explore availabletax credits. If you have children, you may also want to knowif you can deduct childcareexpenses. Additionally, understandinghow to file estimated taxescan be beneficial for your financial planning, especially as a military member. Finally, if you're self-employed, be sure to review theself-employment taxregulations to ensure compliance.