Moving across country is an expensive proposition. If you’re moving to accept a new job or as part of a job transfer, however, there may be some good news on the horizon. In many cases, the IRS will let you declare a tax deduction for using a car shipping company to transport your car to your new home. Take a look at how it works.
Do You Qualify for the Tax Deduction?
If you use a car transport company ships your car, you may qualify for a tax deduction if you meet the requirements laid out by the IRS, sometimes known as the “distance and time test.” Look them over and see if you can check them all off.
- Is Your Move Related to Work? Your move must be required as part of your employment for your deduction to be recognized.
- Is Your New Workplace Far Enough Away From Your Old Home? Your new workplace must be more than 50 miles further from your previous home than your old workplace was. Note that this requirement doesn’t ask that your workplace be just 50 miles away. If your old home was, say, 30 miles from your previous workplace, you now have to add 50 to your previous commute. In this example, your new workplace must be more than 80 miles away from your previous home. Of course, if you’re moving far enough to require a car transport company, the answer to this question is almost certain “Yes.”
- Have You Worked in the New Location Long Enough? If you’re employed by an outside employer, you must work in the job in your new location (the one to which you’re shipping your car) for at least 39 weeks out of your first 12 months in that new location. If you’re self-employed, that number jumps up to a requirement of 78 weeks out of the first 24 months.
You have to have the right answers to all these questions, not just one of them, to qualify for the tax deduction. Use IRS Form 3903, the Moving Expenses form, to file for your deduction.
Don’t Forget These Other Auto-related Tax Deductions
If you use a car transport company to ship one or more cars, but you still drive to your new home, don’t forget to deduct the mileage as a moving expense.
Other tax deductions you should be taking for your car include:
- Mileage, parking and tolls incurred in connection with volunteer work (these are considered charitable deductions)
- Car washing expenses if you use your car for business
- Any unreimbursed expenses related to an auto accident in which you were not at fault
When You’re Ready to Ship Your Car
Having a car transport company ship your car as part of your cross-country move can make the entire process so much simpler. You don’t have to wear yourself out with a drive of hundreds or even thousands of miles, and you know your car is being well cared for while you focus on all the other issues involved with moving.
When you’re getting ready for a major move, give us a call to see how we can help you. We’re known for great service and honest pricing, and we’ll treat your car as if it were our own. Call us for a free, no-obligation quote today.