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Are PCS expenses tax deductible? Sometimes!

While many PCS expenses are paid for or reimbursed by the military, you may be able to deduct some non-reimbursable expenses from your federal taxes.

The key is to keep all your receipts, so when you file your travel claim or your taxes, you will have them handy.

For more information and examples, check out IRS Tax Topic 455, Moving Expenses.

Only active duty military members who are PCSing or, in some cases, their unaccompanied family members, can deduct moving expenses. This includes moving to your first duty station, or when separating or retiring from the military.

MilitaryOneSource.com’s MilTax’s tax preparation and e-filing software is available from mid-January through mid-October, and can help with filing your taxes electronically — for free.

So what expenses can be deducted?

In general, you can deduct unreimbursed expenses directly related to the moving and storage of your household goods, as well as costs (subject to approval) related to travel from your old location to a new one. This includes expenses for the taxpayer and any member of their household.

Among the costs you can deduct as part of your move are:

  • Packing materials
  • Shipping of vehicles
  • Transporting pets
  • Stopping and starting essential utilities
  • Some storage fees
  • One night’s lodging at your old location if your furniture has been moved
  • First night’s lodging at your new location
  • Moving of household goods, whether by car, container, or via a moving contract

To be considered a reasonable travel expense, the route you take, for example, must be the shortest, most direct one available from your previous home to your new one.

What expenses cannot be deducted?

The following costs are not deductible:

  • Meals
  • Temporary lodging after the first night you arrive at your new location
  • Vehicle registration
  • Driver’s licenses
  • Purchasing or renting a new home
  • Other expenses for stopovers, side trips or pre-move house-hunting expenses

The IRS has a wealth of additional information to guide you with deducting moving expenses.

How to report deductible expenses

Deductible moving expenses are reported on IRS Form 3903, and any deduction on that form is reported on your regular federal income tax return.

The IRS website provides additional information on the forms used to report moving expenses.

Reimbursements

Many moving expenses are fully or partially covered by military allowances. You cannot claim any expenses paid for by the military, whether paid directly or reimbursed. For example, you cannot deduct mileage and lodging that was reimbursed under the military’s Monetary Allowance in Lieu of Transportation, typically called mileage, or the PCS Per Diem rates.

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