Saving taxes when moving for the job

Anyone who wants to assert themselves against numerous other applicants on the competitive job market and get their dream job has to be flexible these days. A job-related move is sometimes inevitable. However, there is good news for employees: they can claim the related costs as income-related expenses for tax purposes.

A distinction can be made between general and other moving costs. You have to declare the former in full, the latter can be deducted from the tax with a lump sum. You should keep the cost receipts in any case.

These are the prerequisites for claiming moving costs

Moving to another city is always associated with stress and organizational effort. This is all the more true if a new job or a professional transfer is the reason for moving. The good news is that employees can tax relocation costs.

The prerequisite is that it is demonstrably a job-related relocation of the center of life. On the other hand, those who move purely for private reasons – for example, because they love a lot, a larger apartment, or a better location – can only benefit from a tax reduction for household-related services.

The job has been relocated, for example, if:

• Your superior employer is transferring you to another place of work
• You have to move into a company apartment
• Your commute to work is shortened by 30 minutes per trip by changing your place of residence

With the shipping costs, only the labor costs can be deducted from tax

Anyone who hires a forwarding company to move can only claim the labor costs for tax purposes, but not the required material such as cardboard boxes. For the expenses to be recognized by the tax office, the removal service provider must issue an invoice. This should show the costs for labor and material separately. Since cash payments cannot be traced, you have to pay the invoice by bank transfer so that you can deduct the labor costs from the tax.

If you want to move with a forwarding agency, it is advisable to make a comparison of moving prices on the Internet beforehand. This keeps the costs associated with moving to a minimum. Here you have to indicate where you want to move from to where and other details of your change of residence. After a few days, you will receive free and non-binding offers from various moving companies that you can compare directly with one another.

When to keep receipts and what the moving fee is all about

The moving costs can be deducted from tax as so-called business expenses, whereby a distinction is made between general and other moving costs.

General moving costs are :

• Tours to visit
• Service of a moving company
• Costs for a brokerage for the old apartment
• Temporary double rent payments

Also, you should deduct the general relocation costs in full with the help of receipts or bills and receipts. All evidence related to the move must be collected. The other costs, on the other hand, can be claimed using the flat-rate moving fee. If the other costs exceed the lump sum, you should also collect receipts for this and write them off in full from the tax.

Since March 2020, the flat rate has been 820 dollars for singles and 1,639 dollars for married people. There are also surcharges for other people living in the household of 361 dollars each. If you have already moved because of the job in the past five years, the flat-rate moving fee increases by 50 percent.

Some expenses may not be tax-deductible even if you move for the job. This includes, for example, expenses for the renovation of the new apartment or furniture storage costs.