Moving can not only be stressful, it can also be expensive. But if you plan cleverly, you can reclaim a significant proportion of the moving costs through tax. In this article, we will show you how you can deduct your move for both personal and professional tax purposes, even without having to submit every single receipt.
Contents of this article:
1. job-related relocation
1.1 Advertising expenses
1.2 Moving costs lump sum
2. deduct removal costs privately
3. tips and conclusion
A job-related relocation is imminent - but when is it considered "job-related"? There are various possible reasons or requirements for this.
For example, if an employer relocates or transfers you to another location, the move is clearly related to the professional context. But even if you have a new employer and have to move near your new job, this can be considered a work-related move. Other reasons include a significant reduction in your travel time to work, whereby a saving of at least one hour per day is assumed. However, moving into or vacating an official residence or ending a double household can also be reasons for a work-related move.
Employees have to spend money on many things for their job. These costs, be it training, specialist books or even moving house, can then be deducted for tax purposes and are known as income-related expenses.
If the move is work-related, this opens up further tax opportunities. The work-related expenses that you can claim in this case include
Other costs incurred in addition to those mentioned above can be declared as a lump sum for moving costs or as actual costs. Precise documentation of all receipts and records is useful for this. You may be able to get more money back by submitting your actual costs than with the lump sum. Nevertheless, this can be a relief and also a guideline if you have not collected all receipts. So don't panic if you have lost one or two receipts! Every taxpayer can use the lump sum for moving costs once per move in their tax return - it covers other expenses during the move. The lump sum for removal costs includes
The lump sum for these other relocation costs is regularly adjusted by the Federal Ministry of Finance and has been repeatedly increased in recent years. For relocations from March 1, 2024, the following l ump sums can be reimbursed tax-free or deducted as income-related expenses: The tax-free lump sum for other relocation costs of the person moving (Section 10 (1) sentence 2 no. 1 BUKG) is EUR 964 (previously EUR 886 from 01.04.2022). For each additional person (spouse, partner and unmarried children, stepchildren and foster children who continue to live with the person moving after the move (Section 10 (1) sentence 2 no. 2 BUKG)), the amount is €643 (previously €590 from April 1, 2022). Anyone who did not have accommodation on the day before loading the household effects or does not move into accommodation after the move (Section 10 (2) BUKG) can deduct € 193 (from 1.4.2022: € 177).
By the way: Even if you change your place of residence as part of your first vocational training or during your first degree course, you have the option of declaring the relocation costs incurred as special expenses in your tax return, with a maximum amount of €6,000. In the case of relocation due to a second vocational training course, such as a Master's degree, the relocation costs can be claimed as anticipated income-related expenses. However, it is important that there is a clear connection to the subsequent professional activity.
Anyone moving house for purely private reasons, e.g. because the landlord has given notice or because they are moving in with their partner, can deduct at least part of the costs. As part of the so-called household-related services, 20 percent of the labor costs are deductible annually, up to a maximum of 4,000 euros. These household-related services include, for example, if you hire a removal company for your move.
If a move is necessary for health reasons, for example due to a disability, an accidental injury or for reasons of age, the relocation costs can be declared as an extraordinary expense in the tax return. In this case, the tax office is entitled to request a medical certificate as proof. In this case, you must enter the removal costs in your tax return as an extraordinary expense.
Careful documentation of your costs is definitely advisable and important. This not only provides clarity in the event of queries from the tax office, but also makes it easier for you to control the financial aspects of the move. A structured folder in which you store all documents in an orderly fashion can make the subsequent process much easier. In addition to a physical folder, cloud storage or specialized apps can also help to store all documents securely and make them quickly accessible when needed.
As you can see, whether you're moving for work or for pleasure, it's definitely worth doing your tax return! If you wish, you can also get help from a tax advisor. Moving companies can also often be helpful, especially for relocations, as they are experts in the field and can take some of the work off your hands in terms of documentation and planning.
Moving is not only associated with organizational challenges, but also offers tax opportunities. By making clever use of tax deduction options, you can significantly reduce the burden on your relocation budget. Regardless of whether you have just moved for business or pleasure, being able to deduct the costs at the end of a tax year is always handy. In the best-case scenario, a decent refund can even pay for your next vacation. With this in mind, we wish you a stress-free move and lots of fun saving on taxes!
Global Move Management
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85551 Munich / Kirchheim
Germany