Cost to ship a car: Do I get a tax deduction?

Posted by:

Benjamin Franklin once said, ‘In this world nothing can be said to be certain, except death and taxes.’

This quote sounds too dramatic, doesn’t it?! Can taxes truly be so categorically persistent? In fact, during the past centuries, despite changes in taxation formulas, the principle of taxation per se has remained intact.

Any positive aspects of this persistence – I mean, in addition to the public services that we get? Actually yes! Where there is taxation, there are also tax refunds! In the U.S, not even a government shutdown could get in the way of the tax filing season. Regardless of the rumors that the filing season would be postponed and the tax refunds delayed, that was not the case.

Filing your 2018 tax return

The filing season opened on January 29, 2019, and will continue until April 15, 2019. For those who live in Maine or Massachusetts, the deadline for filing the federal tax returns will be April 17, 2019. Usually, this is the season which raises many questions for those who are filing. How do I know if I have to file a tax return? Which filing status should I choose? What is my tax bracket? Do I have any dependents? What income qualifies as taxable? What items can be tax deductible?

While looking for the ins and outs of taxation, the above questions are just the tip of the iceberg. We’ve discovered many more while exploring the tax-related pages. Also, as if taxes were not complex enough, frequent changes in different formulas or tax categories add to the ‘confusion’.

Changes in the Tax Refund Laws

Usually, there are certain changes in the IRS regulation each year, and this year will not be an exception.
One of the main changes consists of the way moving expenses are considered. According to section 11049 of The House of Representatives, there has been a suspension in treating moving expenses as tax deductible.

For all those individuals who are moving to another city or state for work, the change means that all the moving expenses will not be eligible for tax deduction anymore.

Moving expense deductions before the Tax Reform

Before the changes in the legislation, you could account your moving expenses as tax deductible if:

  • Your employer did not pay or reimburse the moving costs.
  • You passed the Distance test: There needs to be a certain distance from your new work location to your former home.
  • You passed the Time test: You must have worked for a minimum amount of time before moving and also after moving at the new job.

These criteria now are revoked and will not count while filing for tax refunds this year. There is only one exception though!

Military exemption

According to the latest bill passed by Congress the tax reform holds:

“Except in the case of a member of the Armed Forces of the United States on active duty who moves pursuant to a military order and incident to a permanent change of station, subsection (a)(6) shall not apply to any taxable year beginning after December 31, 2017, and before January 1, 2026.”

For more information on this bill, read here.

This new bill is definitely not favorable for all those who have to move for work reasons. Nevertheless, I would say that it makes sense for the military members to be excluded from it. For soldiers and their families, moving is an essential part of life. They are on the road relocating most of the time.

For them, it becomes important to make the moving process as less tiring and stressful as possible. In addition to moving the household, moving a car is often something essential to consider.

Vehicle relocation costs are a significant part of the overall moving expenses. According to the new bill, for all military members who are on active duty, car moving expenses remain tax deductible.

If you are a member of the military, once you are ordained to a permanent change of station, you can file for your car shipping costs in your tax return forms. A permanent change of station includes moving from your home to the first post of permanent duty; from one post of permanent duty to another, or from your post of duty going back home.

Therefore, since moving your car will be tax deductible, the only question remains: how to move it? Would driving it yourself, hiring a driver or asking for an auto-shipping company be the best choice?

We, at Corsia Logistics, have explored the pros and cons of each option. Considering long distances of the usual moves, the practicality and the costs, choosing an auto transport company is the best choice in almost all cases.

Are you assigned to move overseas?

Below are some considerations to help you out while moving your car.

  • Size limitations: Government will only cover the shipping of a standard sedan. If you own an SUV or any other oversized car, you may need to figure out a plan B.
  • Time: You have to make sure that your vehicle will reach the destination within your designated timeline.
  • Licensing: You have to check in advance for local vehicle registration and licensing rules.
    You can check with your relocation office and receive the proper guidelines so that you do not pay any fines.
  • Weight: Check beforehand what the allowed vehicle weight is. In your calculation, take into consideration the items you will leave inside the vehicle. These belongings need to be vehicle-related items such as child car seats, car covers, etc.
  • Modifications on the vehicle: Check in case you have added any modifications to your vehicle if they are ok with the local regulations.

Choosing a good auto-shipping company can save you the stress of worrying about making the right choices. You need a reliable auto transporter who has a track record in shipping vehicles overseas – maybe even tanks –  and can advise you on the process of vehicle relocation.

Corsia Logistics has experience in providing auto transport services nationally and internationally. We know how tiring the moving process can be and we offer our expert advice to facilitate your vehicle relocation experience.

In case you would like to know in more details how shipping a car works, our logistics experts will gladly assist you.

Not a military member?

As explained above, members of the military can still consider their moving expenses as tax deductible. For all other taxpayers though, relocating their vehicle will represent a huge chunk of moving expenses. Therefore, if you are not a member of the armed forces, you need to select your car shipping company very carefully. Reliability and costs are two important criteria you should pay attention to.

In order to check if an auto shipping company is reliable get convinced about its:

  • Licensing
  • Insurance
  • Reviews
  • Quality of customer service
  • Responsiveness
  • Experience

How are prices determined? There are different factors that affect your vehicle shipping quote. They can be summarized as below:

  • Vehicle make and model
  • Pick up and delivery locations
  • Carrier type: open or enclosed
  • Distance traveled
  • Vehicle condition
  • Supply and demand

Whether you need to ship your car from New York to Boston, or anywhere else in the country, we’ll offer suggestions on how to make your car shipping experience less expensive and maximize your overall costs. To learn more about how we calculate car shipping costs, feel free to call us at (818) 850-5258) or request your free quote online.

Which criteria matter more?

If I would have to rank these two basic aspects, I would definitely put reliability first. Especially considering the fact that the moving expenses are not tax deductible anymore, a reliable shipping company becomes a priority.

Price should not be the first or the most important criteria while choosing an auto transport company. Regardless of the lower price, you would not want your car to arrive at its destination damaged or unreasonably late. The post-repairing costs will be much higher, not to mention any inconveniences.

Fun facts about taxes

Since we cannot avoid taxes, let us try to digest the above news on tax deductions with some fun facts:

Taxes seem not only persistent, but also quite complex and time-consuming. If time is money, then lots of money is spent on this process. At least when it comes to car shipping, try to choose wisely so that you optimize your budget and car condition.

Share Button
0

About the Author:

Ina Gjika is a banker who loves to dive into philosophy and dance to the music beats. Ina also enjoys getting lost into her bookshelves and smelling freshly ground coffee, while dreaming about exploring the world. She holds two B.A majors in Business Administration and Political Science & International Relations, as well as a B.A minor in Economics.
  Dispatched

Add a Comment