A great way to make back some of your moving budget is to use moving costs as a tax deduction. While not all lost assets may be able to be claimed as tax write-offs a great number of them can be. Come with us to look at what you should be checking into if you’ve moved this year, are planning a move before your taxes are due next year, or want to learn how moving your office can make money for you.
Expenses such as the base cost of moving may be tax deductible if you are a small business or in a number of sectors. While some of these potential tax deductions depend on your state’s exact exemption policies, national income tax can be greatly offset by a simple move.
For instance, if you move for the purpose of upgrading your business to hire more people or work toward a larger business presence, it is very likely that you are eligible for a tax break. Though these laws may change in the future, as of this writing, most business expenses regarding moving are given a 70-90% deduction.
If your company is in high demand, the time lost due to moving may be an acceptable claim on your business taxes for the following fiscal year. Depending on your exact accounting, this claim may even count for the next fiscal quarter. Though this typically applies to businesses in the several-hundred-thousand-dollar-earnings-and-up category, smaller businesses may have a chance at it as well.
In truth, it never hurts to have your accountant check your state laws. You may find some extra change just waiting to be grabbed because you decided to move.
Employee Time Lost
If you have given your employees a stipend during the business’s time lost due to moving, you may be able to claim this stipend as a tax-deduction. This is typically done when there is an extended period of lack of work, such as a total loss of a place of business due to fire, storm, or other destructive cause. If you are being compensated by an insurance claim, you may not be eligible for this tax write-off.
However, if you are not involved with an insurance claim or you have a longer move for another reason, it is a great way to find extra tax deductions during the tax season. And that stipend may be used to encourage employees to stay with the company during the downtime, allowing them to remain comfortable during the transition of the business and their employers.
We make no claim that moving is a cheap experience, especially when dealing with a corporation or large business. There are a great number of items to move, perhaps thousands of employees’ work centers to take with you, and a plethora of data. It’s a big job and it’s a lot of time on the clock for the moving company. A little smart accounting will help it make sense (and cents) for your business during the tax season.
You may wish to itemize, splitting your taxes into categories like those above. Or you may simply wish to attach the receipt for the total move and all time lost to the forms you file. We do strongly recommend itemization for the ease of those receiving the documents. More often than not, they request itemized receipts while reviewing your forms–so why not go ahead and give those documents to them to begin with? This saves you the time and effort of responding to their request and may allow your documents to go through faster.
This post is promoted by lawrencemoves.com. Considering a corporate move? Massive scale or small business, we do it all. Call today for a quote.