Watching your business outgrow your current offices is a happy problem. You don’t fit where you’re at, and by moving to a new location, you’ll have more room to continue to grow.
Here’s what you need to know about moving your business and what business moving expenses are tax-deductible.
Tax Deductible Business Moving Expenses
Only businesses can claim moving expenses as a tax deduction. If you’re upgrading from an apartment to a house, or you have to move to a different state for your new job, your personal moving expenses do not qualify for tax deductions.
If you are moving your business, not all business moving costs can be used as part of your deduction. Only the direct cost of moving your business’s office supplies and tools is deductible. This includes:
- Any brokerage commissions paid to find the new location
- Surveying the new space to make sure your office equipment will fit
- Packing
- Loading
- Transport
- Unpacking
Any other fees, charges, or costs that are part of your company moving to a new location, including expenses around moving your employees, do not qualify for a deduction.
Moving a Sole Proprietorship or Partnership
If your company is a sole proprietorship or partnership, you can deduct moving fees if you meet two criteria: the distance you are moving and how long you work at the new location.
Distance
Your new location must be at least 50 miles farther from your home than your existing business location. If you currently have a long commute of 60 miles to your company but then move your company 5 miles away from your home, it does not meet the distance requirement.
Time
To deduct moving expenses as a self-employed person in a sole proprietorship or partnership, you must work full time at the new location for:
- at least 39 weeks during the first 12 months
- at least 78 weeks within the first 24 months
If you only work part-time or do not work a minimum of 39 weeks, you do not qualify for the deduction. There are no absolute hours you must meet to qualify for full or part-time work under this regulation, so you only have to meet your industry standard for what full-time work looks like.
For example, full-time work in an industry that works four days a week would mean that you only have to work four days a week to qualify as working full-time.
What Information Do I Need to Claim Deductions?
Track and save all receipts you think could be related to your move. It is always better to have too many resources than to struggle to find the right charges and paperwork associated with your move.
For most business owners, your best option for taking advantage of moving deductions is to get the help of a financial advisor. They’ll work with you to ensure you’re getting the highest deduction while still staying within the tax laws.
If you choose to manage the deduction yourself, start with IRS form 3903.
Start Your Move Today with Mesa Moving and Storage
You trust your employees with your business. They are experts at their job and know exactly what they need to do, but they shouldn’t be responsible for moving office equipment. Save you and your employees from having to break your backs, and choose Mesa Moving and Storage instead. We’ll make moving easy while minimizing the disruption a move brings to a business.
The pros at Mesa Moving and Storage can help you decommission your existing office space and offer you liquidation and recycling services.
Check out our locations in Boise, Salt Lake City, Denver, Helena, Whitefish, Bozeman, and Grand Junction.
