Relocating to Davis, CA—whether to be closer to UC Davis, start a new career, or settle into a family-friendly neighborhood—is a great decision. However, the logistics and costs of moving can add up quickly.
If you are trying to maximize your budget, you might be researching how to claim moving expense deductions on your upcoming tax return. While the rules have changed in recent years, there are still opportunities for Davis residents to save.
Here is a quick guide to understanding moving tax deductions in California.
Who Can Claim Moving Expense Deductions?
To successfully claim moving expense deductions, you need to navigate both IRS and California Franchise Tax Board (FTB) regulations.
The Federal Rule
For federal tax returns, the moving expense deduction is currently suspended for the general public. The only exception is for active-duty military personnel relocating under military orders. If you are stationed at nearby Travis AFB and moving to Davis, you may qualify for this federal deduction.
The California State Rule
If you are moving to Davis for a new job, California state taxes still allow you to claim moving expense deductions, provided you pass two tests:
- The 50-Mile Distance Test: The distance from your old home to your new job in Davis must be at least 50 miles greater than the distance from your old home to your previous job.
- The 39-Week Time Test: You must work full-time as an employee in the Davis area for at least 39 weeks during the first 12 months after your move. (Self-employed individuals must work full-time for at least 78 weeks during the first 24 months).
What Moving Costs Can You Deduct?
If you meet the criteria for California state taxes, you can deduct "reasonable" moving costs. This typically includes:
- The cost of hiring professional movers in Davis.
- Packing supplies and crating services.
- Transporting your household goods and personal effects.
- Short-term storage costs incurred while in transit.
Note: You cannot deduct the cost of meals while traveling, nor can you deduct expenses related to buying or renting a new home in Davis. Always consult a qualified tax advisor to confirm your eligibility.
Keep Your Move (and Your Paperwork) Organized
If you plan to claim moving expense deductions this year, keeping meticulous records is vital. When you hire a professional team like Moving With Grace, we provide clear, detailed invoices for your records, so you know exactly what you paid for packing, transportation, and labor.
We pride ourselves on being the most trusted local movers in Davis, CA, offering stress-free relocations so you can focus on settling into your new home.
Planning a move to or from Davis?
