Welcome to our Moving guide. In this article, we will show you how to deduct your expenses from your taxable income. We will discuss both general business expenses and specific moving costs. You will read how to arrange tax-deductible costs for your move and what you need to do to pay less tax. We use clear examples, anecdotes and practical tips. Let's discover together how to make your moving costs deductible and save on income tax!
Are moving expenses tax deductible?
You want to know how to deduct your expenses from your taxes. We explain how to book tax-deductible expenses and which expenses for a move are deductible. We discuss general business expenses and specific matters for a move for business reasons. This will give you insight into the rules and save on moving expenses. Read on and discover what you can do to pay less tax!
What are deductible expenses?
Deductible expenses reduce your taxable income. This means you pay less income tax. Think of expenses such as travel expenses, work space and other business expenses. If you move for work, you often deduct many expenses. For example, you can deduct the costs of a company move and packing materials. The idea is simple: the more expenses you can deduct, the lower your taxable income becomes. This way you get a direct tax benefit instead of a number of expenses.
What are professional expenses?
Professional expenses are expenses that you incur to perform your work. You spend money on a workspace, office supplies or business furnishings. Additional business travel expenses also fall under this. Whether you have a sole proprietorship or work as a private individual, these expenses help you to pay less tax. If you are moving for business reasons, you can often also deduct those moving expenses. In this way, you ensure that your investment in your work is amply rewarded. Various expenses are deductible, but which ones?
Which professional expenses are deductible?
You may enter various business expenses. Below is a short list:
- Car costs
Fuel, maintenance and insurance for business trips. - Travel expenses
Public transport costs, mileage allowance and additional business travel expenses. - Workspace
Rent and furnishing of a home office or external workplace. Don't forget to deduct this from the moving costs. - Household effects
Office equipment and furniture that you use for business. This is of course part of the costs of the move. - Mediation costs
Brokerage fees or no-obligation quotes from moving companies. This may be tax deductible.
Always keep your quotes and invoices. This way you show that the costs for a move are deductible and you meet the requirements of the tax authorities.
These are not tax deductible moving costs
Not all expenses can be deducted. Some expenses fall outside the rules. For example:
- Purely private expenses
Think of clothing without a company logo or a nice lunch with friends. - Unsupported costs
Expenses without official invoices or quotes. - Costs without a business connection
Hobby costs and other personal expenses.
Make sure you can demonstrate that the costs are of a business nature. Therefore, keep all supporting documents safe.
More business expenses, less taxes
Deducting more expenses often means paying less tax. Lowering your taxable income results in a nice reduction. Keep the balance: do not make unnecessary expenses. Only invest in what you really need. Sometimes you prefer to choose a fixed amount rather than booking all actual expenses. This way you keep your administration clear and you prevent mistakes. When you move as an entrepreneur, you have quite a few advantages. Because all entrepreneurs can enjoy various business benefits.
Which expenses are deductible if you work from home?
Working from home offers opportunities for deductible expenses. If you have a workspace in your home, you can deduct these expenses, for example:
- Workspace
A separate room or a clearly demarcated part of your home. This can be deducted. - Office furniture
A desk, desk chair and storage cabinets. It is best to keep the receipts for these because you can deduct them as business furnishings. - Heating and electricity
Part of the costs, depending on the size of your workspace or if you have purchased a house. - Software licenses
Programs you use for your work. Javascript is at the top of this list, but also consider Adobe.
Make sure you clearly separate your workspace from your private space. This makes it easier to show which expenses are deductible.what is the difference between expenses and depreciation?
You write off direct costs in one go. With depreciation you spread large expenses over several years. See the table below:
| example | direct costs | depreciation |
|---|---|---|
| €600 laptop | Complete in 1 year | Not applicable |
| €15,000 car | Not in 1 year | In 5 years |
| moving costs | Deductible in one go | Not applicable |
This way you divide large expenses and get a more realistic picture of your moving costs.
Should you enter actual professional expenses or an expense allowance?
You have two options when booking costs. You can choose actual costs or a cost allowance.
- Actual costs
You collect evidence and book all costs incurred. This works well if you have a lot of costs. - Cost allowance
You use a fixed amount that you can easily deduct. This saves administration work and prevents errors.
Choose what best suits your personal situation. Compare the benefits and make a well-considered choice.
Can you always deduct VAT?
In many cases, you can deduct VAT on business expenses. As an entrepreneur, you can reclaim VAT on costs such as a removal company and office supplies. There are exceptions.
- In the case of mixed use, such as a car for business and private use, you only deduct the business part.
- Some products are not eligible for VAT deduction, such as alcoholic beverages.
Please consult the tax authorities' website for the most up-to-date laws and regulations.
Is it a good idea to incur a lot of business expenses?
Deducting more expenses sounds attractive, but be careful. Too many expenses reduce your profit and can damage your cash flow. Always ask yourself: “Do I really need these expenses?” Invest in what contributes to your business growth and keep your administration clear. This way you can optimally benefit from your tax advantages.
Want to know more about what you can deduct taxes on?
Also for a private move it is wise to check this. For more information about the national mortgage guarantee, it is best to consult the website of the tax authorities. Here you can find all information about income tax for entrepreneurs, whether you are entitled to a moving costs allowance, information about a mortgage or loan or about 'professional expenses'. You can also find out here whether it is possible to deduct tax returns from your assets. Do you have questions about box 1 or box 3, do you want more information about a subsidy or about something that is or is not tax deductible? Then you can also find all this on the website.
Always ask for an invoice for business reasons
Always ask for an invoice for every purchase or service. An invoice proves that you have incurred costs. Make sure that the invoice contains:
- Name, address and VAT number of the supplier
- Date and invoice number
- A clear description of the costs
- The total amount and the VAT
Without an invoice, you cannot prove that the costs for a move are deductible. Keep all your invoices carefully.
Collecting evidence
Evidence forms the backbone of your administration. It helps you to demonstrate that your business expenses have actually been incurred. Think of:
- Invoices and receipts
- Bank statements
- No-obligation quotes from moving companies
- Contracts and agreements
We recommend that you use a digital system. This way you can quickly find what you are looking for if the tax authorities check you.
Deductible moving costs
1. What are deductible costs when moving?
When you move for business reasons, you often incur a lot of costs for moving. Think of costs for a moving company, packing materials and extra kilometers. Double rent if you temporarily live in two homes also falls under this. You can deduct all these costs from your taxes. This makes the whole thing tax deductible and you pay less income tax.
2. Moving costs are tax deductible: who qualifies?
Both individuals and entrepreneurs are eligible. If you move for work-related reasons, you may deduct the costs of moving. This also applies if you move to a location that is at least 25 kilometers closer to your work. If you move within 2 years of your new job, you often make the costs fully deductible. You may also be able to deduct if you take out a loan or mortgage to pay for the move. Sometimes your employer offers a moving costs allowance. This can help you save extra.
3. Example and case study
Take Emma as an example. She is a self-employed person and works as a graphic designer. Emma moved to be closer to her most important client. She hired a moving company and requested free quotes from various movers. She paid for packing materials and drove extra miles. Emma managed to make these moving expenses tax deductible. Her expenses resulted in a nice reduction on her taxable income. This allowed her to invest in her business and save on income tax.
4. Cost calculation: fixed amount or actual costs?
Sometimes the tax authorities offer a fixed amount. For example, when moving for business reasons, you can sometimes deduct a fixed amount of €7,750. If your actual costs are higher, you book those costs. Collect all the evidence to show what you actually spent. Choose what best suits your personal situation.
5. Which moving costs are deductible in practice?
In practice, you can deduct various costs. Examples include:
- Transportation costs
Rental of a moving van and fuel costs - Packing material
Boxes, tape and protective material for your belongings - Double rent
Temporary double rent if you are between two homes - Mediation and brokerage costs
Costs for housing outside the place of residence and for finding a new home
Not all expenses are booked in full at once. Sometimes you only deduct a portion or divide the costs over several years. Consult the website of the tax authorities for the precise rules. This way you can be sure that you make all moving costs tax deductible.
FAQ: Frequently asked questions about deductible expenses
Question 1. Are all moving costs tax deductible?
Not all moving expenses can be deducted. You must meet specific conditions, such as a move for business reasons and a saving in home-work distance of at least 25 kilometers.
Question 2. Can I deduct the fixed amount of €7,750 if I incur moving costs?
Yes, if you move for work, you can sometimes deduct a fixed amount of €7,750. Always check whether you meet the conditions. Look carefully at whether it is a business relocation concerns and whether this is tax deductible.
Question 3. How do I know which costs I can deduct as a private individual?
If you move for work, you may deduct certain costs. Read the rules on the tax authorities' website or ask a specialist for advice. Do you want to deduct costs from your taxable income or do you want to deduct moving costs? Then it is very important to ask for more information about this.
Question 4. Do I always have to request an invoice for moving costs?
Yes, without an invoice you cannot prove that you have incurred costs. Always ask for an invoice and keep it carefully. Of course, you only need to be able to prove and know the moving costs. And note: these are limitedly deductible for entrepreneurs.
Question 5. Can I also deduct costs for working from home?
Sure! If you have a separate workspace and incur additional costs for furniture and energy, you may deduct those costs.
Question 6. What if I move within 2 years of my new job?
Then you can often deduct all costs for a move. Make sure you collect the right evidence and meet the conditions. Your moving costs as an entrepreneur can be business if your move takes place within 2 years after moving your company.
Question 7. Do I need to enable JavaScript on the tax authorities' website?
Yes, often the tax authority website does not function properly if JavaScript is disabled. Enable JavaScript so that you get the most up-to-date information.
Question 8. Does my tax partner have any influence on the deductible costs?
Sometimes you divide costs with your fiscal partner. This can affect how you deduct the costs. Ask your advisor about the exact rules.
Do you have business moving expenses?
We hope that you now have a clear picture of which expenses you can deduct. We have discussed how to book deductible expenses for a move and other professional expenses. Make sure that your administration is in order and keep all invoices and quotes. Compare quotes from moving companies and consult the website of the tax authorities for the latest laws and regulations.
Moving is happy to help you save on moving costs
Do you have any questions or would you like to hear more examples? Then leave a comment. This way we help each other to work smarter and pay less tax. Request free quotes from Moving so that you can move as well and cheaply as possible.
On behalf of the Moving team, we sincerely thank you for reading. Good luck with your move and deducting your expenses!
