Moving your business to a new location can be very expensive – but did you know that many of the expenses are tax deductible? Make sure you don’t pay more than you have to by claiming these relocation deductions.
Does your business qualify for a moving TAX deduction?
Corporations and LLCs can deduct moving expenses regardless of where they move. Sole proprietorship and partnerships have to meet certain rules:
• Must relocate at least 50 miles away
• Must work at least 39 weeks in new location during the next 12 month period after the relocation
You can deduct everything!
When an employee relocates for work, there are limits on what can be deducted from tax expenses. With businesses though, all expenses can be deducted. Keep this in mind if you are considering doing some of the move yourself. You might save money by packing and transporting some of the belongings yourself but, once you calculate in the deduction, the savings might not be that great.
Be sure to keep track of all moving expenses for your business in a clear way. You will want receipts for everything from the boxes you purchase to storage fees. Even if you hire a moving company to do most of the move for you, such as packing and unpacking, there will likely still be some things you will want to move yourself – such as sensitive items and documents. You can deduct the costs of moving items in your personal vehicle (or employees’ vehicles), but must use the IRS method of calculating gas costs based on standard mileage rate.