Taxes ???
So it’s PCS season for us military and moving time for the rest the world.
You know summer time- the time when school is out, the weather is good, and people try to plan their transfers whenever possible!
This is the time where people plan their move, sell their house and are looking to rent or buy another house. I am sure that this is the time everyone is LEAST interested about their taxes.
You know the things that we have to complete every year to stay compliant with the IRS and are due April 15. So by summer they are a distant memory, since April is long gone.
Here’s the thing, your move affects your taxes!
- Move Expenses- You are allowed to deduct any unpaid moving expenses as long as they follow the IRS regulations. So it is important to save all the receipts.
- House Going from a Home to a Rental- As discussed here, when your houses goes from a personal property to a rental that rent becomes “income”. While there are a lot of expense deductions you can take, as discussed here you no longer have the deduction from the house being your personal home.
- Going from Owning To Renting- The same thing as discussed here. Under US tax code discussed here, living in a personal property has a lot of deductions. If you go from an owner to a renter, there could be tax burdens.
While the receipts from the moving expenses not otherwise covered is minor the affect of your housing type choice decision on your tax returns is major!
If the effect is going to increase your taxes then make sure you increase the withholding on your taxes. Otherwise, tax time could be very tight and a bad surprise with more to owe than you expected.
What has been your experience? Any surprises at tax time due to “choices” made during moving?
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