Here’s a question we get a lot at PreOwned Auto Logistics, particularly around this time of year: Can you get a tax deduction for shipping your car?
The short answer is: maybe. Here’s what the IRS says about deducting your vehicle shipment costs …
If You’re Relocating for Business, You Can Deduct Your Moving Expenses
If you’re moving because of work, you can declare a tax deduction for using a car shipping company.
It’s important to emphasize that your move must be required as a condition of employment for the IRS to recognize the deduction. So, if you’ve been offered a new job across the country or have accepted a job transfer, you’re in good shape.
Please note, however, that there are two qualifications you need to meet:
(1) Your Workplace is an Acceptable Distance from Your Old Home
The IRS dictates that your new workplace must be over 50 miles further from your previous home than your old workplace was.
This is a little confusing, but it’s really an easy qualification to meet.
What the IRS is basically saying is that if your new job will require you to drive over 50 miles further from your old place, then you’re okay to deduct moving expenses. As an example, if you used to drive 15 miles from your home to work, then your new workplace would need to be at least 65 miles away. Presumably, if you’re considering having a car shipped along with your other belongings, then the distance is fairly significant. If your relocation is taking you a few hours away from your old home, for instance, you easily meet the requirement.
(2) You’ll Work in Your New Location for an Acceptable Amount of Time
As a new or recently-transferred employee, you must work full-time for at least 39 weeks over the 12 months immediately following your move. If you’re self-employed, that number goes up: You’ll have to work full-time for the 39 weeks during the first 12 months, plus another 39 weeks the next 12 months. That equals to a total of 78 weeks for the first 2 years at your new location.
This second qualification may seem a little harsh, but there’s good news. If you haven’t quite met the “time” requirement by the time you file your tax return, you can still deduct your moving expenses if you expect to meet the requirement in the coming months.
Deductible Expenses and Other Tax Tips
You must pass both of the above requirements to meet IRS guidelines. It’s a good practice to keep detailed records, including a paper invoice for shipping your car and all receipts.
You’ll use IRS Form 3903, the Moving Expenses form, when you file for your deductions. Please note that this does not apply to members of the military, who have a different set of regulations for relocation.
The following moving expenses are deductible:
- The costs of having your car shipped by a vehicle transport company.
- The cost of insurance for a shipped vehicle.
- Hotel or lodging along your travel route, or the cost of plane tickets.
- Costs of a rental truck, plus gas and toll expenses.
- The cost of professional movers, and even packing materials.
- The costs of storing or insuring household goods.
If you’d like more information, refer to IRS Publication 521.
PreOwned Can Ship Your Car to Your New Home
If you’re relocating for work in the near future, let us know! We can help you handle the logistics of getting your car to your new home. Our representatives are knowledgeable, and they keep you informed every step of your move.