How to deduct business moving costs
Moving your business can be quite challenging. Even though you hope you would make more profit if you move your business to another state or city, nothing is for certain. However, there are ways to deduct business moving costs in order to save as much money as possible. The first thing you should do is to hire a good moving company. This is extremely important if you wish you have a successful relocation. For this reason, contact Pro Movers Miami and set your moving date. As for the rest, here are all the things that are deductible.
Relocation expenses and employees
First of all, you need to think about your employees. Are they moving with you or are they staying? If there are relocating as well, it is your responsibility to reimburse your employees for moving expenses. This might seem like you would spend more money than you want. However, you should include the amount of these reimbursements as a taxable benefit to the employees. All the commercial movers Miami will tell you to do the same because this is beneficial for your business.
Employees can deduct certain moving expenses from their taxes. However, this is only applicable if you reimburse your employees for moving expenses. This means the company should pay formulas, hotel, moving vans, packing or unpacking, moving quotes Miami, and so on. If you pay any of these, you can deduct them from the company taxes. You should know that an employee cannot deduct any moving expenses from their personal income tax because they will be paid by the company.
Deduct business moving costs related to your company
Now it is time to talk about your company. If you plan to move your business equipment, supplies, and everything from your inventory with moving companies Hallandale Beach, it is possible to deduct these moving expenses. In addition to this, you can also deduct all the costs that are associated with the purchase of renting your new office space. In order to deduct this cost, you need to keep all the receipts. For this reason, prepare in advance one folder where you can keep all these important receipts and documentation. Without them, you won’t be able to deduct any expenses.
In addition to this, if you plan to move as a self-employed business owner, you can also deduct your personal moving expenses. However, this is only possible if you meet IRS guidelines. These guidelines would include the distance test and the time test. The distance test means that your new location should be at least 50 miles further away from your former location. Furthermore, the time test means that you need to work at least 39 weeks during the first 12 months.
Things that you cannot deduct
If you want to deduct business moving costs, you should also know which ones you cannot deduct. These would include the following.
- Expresses that are not directly associated with your move
- Personal moving expenses
- Personal travel expenses