Are Commercial Moving Expenses Tax Deductible?

Are Commercial Moving Expenses Tax Deductible?

Commercial moving in Hialeah can be costly, and there’s no way around that. But what about tax deductions? Some of your commercial moving expenses may actually be tax deductible, although not everything will qualify. There’s quite a bit of money that you can save by claiming certain moving expenses on your taxes.

If you suspect some of your costs are tax deductible, talk to your accountant about your options. The IRS has many regulations about moving expenses, but most of them are aimed at employees, not companies. Here’s some information about moving expenses that you may be able to claim on your business’s tax return.

Employee Moving Expenses

The IRS limits the extent to which employees who move can get tax deductions. However, the situation changes if you, the employer, choose to pay them a stipend to cover their moving costs. These payments can be deducted from your taxes. If you’re moving a relatively long distance that requires employees to move, you can pay for their moving vans, hotel stays, meals, and other expenses. The employee probably can’t deduct these from their own taxes, but you can deduct them from yours.

Commercial Moving Expenses for LLCs

If your business is registered as an LLC, you can deduct the full cost of the move from your company’s taxes. This includes all expenses related to transport, packing, loading, and even surveys of your new space that ensure that your equipment will fit. If you’ve paid brokerage commissions while looking for new commercial real estate, you can deduct that, too.

Commercial Moving Expenses for Sole Proprietorships and Partnerships

If your business is registered as a sole proprietorship or a partnership, there are two criteria you must meet in order to deduct your commercial moving expenses. First, you must move at least 50 miles from your current location. Second, after moving, you must work at least 39 weeks in the new location during the 12-month period directly following the move.

Moving Equipment to a Branch or Subsidiary

If you’ve opened up a new branch or second office, expenses incurred by moving furniture, equipment, and supplies is tax deductible. If the new subsidiary is paying its own taxes, you can split the costs.

Budgeting Your Commercial Moving Expenses: How Much Will You Actually Need to Spend?

We’ve covered how you can deduct some of your commercial moving expenses when you file your taxes. But what will your moving expenses actually be? There’s no single answer to this question, but a commercial moving company isn’t the only thing you’ll need to pay for. You may need renovations or remodeling for your new location, and there’s always a small possibility that equipment or supplies could get lost during the move. To help prevent this, it’s a good idea to take inventory of everything you have while you’re packing, to discourage theft and to help you notice if something goes missing because it simply got lost.

Other expenses can stem from the process of leaving your old office. You may need to repair or upgrade things like carpets or lighting fixtures. If you’re leaving before your lease is up, you may owe your landlord extra fees too.

Then, you’ll need to move contracts for things like phone service, Internet access, electricity, gas, and even vending machines if you have them. You may end up owing some kind of early termination fee for these kinds of things.

Another locus of expense, other than the move itself, is updating your marketing materials and sending out PR announcements. If you have custom stationery, letterhead, or business cards, you’ll need new ones that feature your new address.

And finally, yet another cost can be lost revenue. If your business is closed temporarily because you’re moving, you could lose some revenue you may have otherwise generated.

Commercial Movers in Hialeah

Need an experienced, reliable commercial moving company in Hialeah to help you relocate your business? At Orange Movers, we work with local business owners throughout the Miami area and surrounding region to provide a safe, hassle-free moving experience. To find out more, call us any time, or fill out our contact form to get in touch about your upcoming move.