Today TaxMama hears from Cindy in Hood River, Oregon with a good question. “I’m self-employed and planning to move to another state. Can I deduct my moving expenses? What if I were an LLC or S Corp? Would that make a difference?”
Dear Cindy,
Are you moving someplace wonderful? It looks as if you’re already in a terrific place.
Regardless of the kind of entity your business is, you can deduct your business moving expenses. So see if you can separate out the cost of the business vs personal items that need to be moved. If not, do it based on either the percentage of time or space they take up.
I say time, because sometimes, to get some items out of or into a facility, doors have to be removed, or furniture must be taken apart, or… So pick up the extra hourly cost for that kind of time.
Don’t create an entity now. LLCs, etc. are formed in the state you’re in. You would need to re-incorporate in the new state. Or at least register in the new state. But, you’d still have to file tax returns in Oregon, if you set up the LLC or S corp there.
Incidentally, on your state return, you’ll need to check with someone who knows Oregon tax laws. All states let you deduct moving expenses coming in. I don’t know about moving expenses going out.
Have fun, wherever you’re going! And much success in your business.
And remember, you can find answers to all kinds of questions about moving expenses and other tax issues, free. Where? Where else? At TaxMama.com.
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