Relocating your small business—whether for growth, better visibility, or lower overhead—can be a big step forward. But with that opportunity comes a host of financial considerations. One of the most common questions we get from clients at First Coast Accounting in St. Augustine is: Are moving expenses tax deductible?
The answer? Yes—but it depends.
What Moving Expenses Are Deductible for Businesses?
The IRS generally allows businesses to deduct “ordinary and necessary” expenses involved in relocating business operations. If you’re moving your office, storefront, or warehouse, many of the costs involved in that process may qualify as tax-deductible.
Common deductible moving expenses include:
- Transportation of equipment, inventory, and supplies
- Packing and moving services
- Utility disconnection and reconnection fees
- Lease termination penalties at your previous location
- Basic costs to set up your new business space
However, not all costs qualify. Non-deductible expenses include:
- Buying or selling real estate
- Renovations or improvements to your new location
- Temporary living expenses for owners or employees
What About Personal Moving Expenses?
If you’re self-employed and relocating your business as part of a personal move, the rules are more limited. Due to changes from the Tax Cuts and Jobs Act (TCJA) of 2017, most individuals—including small business owners—can no longer deduct personal moving expenses through 2025. The exception? Certain active-duty military members under specific conditions.
How to Properly Deduct Business Moving Costs
To take advantage of eligible deductions, follow these key steps:
- Keep Excellent Records
Save all receipts, invoices, contracts, and communication related to your move. - Separate Business from Personal
Make sure to clearly distinguish between business expenses and any personal moving costs. - Report Accurately
- Sole proprietors or single-member LLCs typically report these deductions on Schedule C.
- Partnerships and corporations deduct them on the appropriate business tax return.
Final Thoughts from First Coast Accounting
Moving your business is no small feat, but understanding what’s deductible can ease the financial load. If you’re planning a relocation or recently completed one, reach out to First Coast Accounting. We’ll guide you through the process, help you identify all eligible deductions, and make sure your business stays financially sound through every stage of your move.
Let’s make your transition smooth—and smart. Contact us today to schedule a consultation
