WHAT IS Transportation And Storage Costs
Through 2017, taxpayers were allowed to deduct transportation and storage costs when relocating for work. Beginning in 2018, only active-duty military personnel are eligible for this deduction and only when relocating due to a military order resulting in a permanent station change. This includes moving from home to a first active duty post, from one permanent post to another, and from a last post back home (or to a nearer location within the United States). Costs related to moving household members are also covered. A person is considered a member of your household if both your former and your new home are his or her main residence. If you qualify, applying for this deduction requires completion of Internal Revenue Service (IRS) Form 3903, Moving Expenses.
In some cases, the military provides an allowance for move-related transportation, storage, or temporary lodging. If this does not cover the full costs, the remainder can be claimed as a deduction. If the allowance provided exceeds actual moving-related costs, the extra should be reported as income by the military on your W-2 or you should report it as income on Form 1040, 1040-SR, or 1040-NR.
BREAKING DOWN Transportation And Storage Costs
Active-duty military can deduct transportation and storage costs related to a qualifying move from their personal income taxes. This includes packing and moving household goods and personal effects as well as storage and insurance for these items while in transit and for up to 30 consecutive days after they are removed from your previous residence. Reasonable travel and lodging for you and all household members moving from your old home to your new one is also deductible. This includes driving expenses, airfare, tolls, and parking fees. For car expenses, it is acceptable to either deduct the standard mileage rate of 20 cents per mile or actual expenses such as gas and oil purchases. If planning to deduct actual expenses, be sure to keep an accurate record.
Items that are not deductible include meals while traveling or car repairs, maintenance, insurance or depreciation. Also, keep in mind that costs must be “reasonable.” Unnecessary side trips and luxury accommodations are not deductible under this policy. Costs related to your move that are not involved with the transport of yourself and your possessions are not deductible, including expenses related to buying or selling a home, home improvements, security deposits, or return trips to your former posting.
Special rules apply when an active-duty service member moves from a post in the United States or one of its possessions (such as Puerto Rico, U.S. Virgin Islands, Guam, or American Samoa) or from one foreign country to another foreign country. When this occurs, additional expenses can be deducted, including the cost to transport household goods and personal effects to and from storage and the cost to store these items for all or a part of the time your main job location is in a foreign country. Moving from a foreign country to the United States or one of its possessions does not qualify as a foreign move.