Doctors: The moving deduction is dead. But you might still rescue the business slice.
How to turn the business portion of your move into a real S-corp deduction using a legitimate home office + accountable plan.
Everything costs a ton these days, including moving. An interstate move can easily run $10,000+.
Unfortunately, for most doctors, moving expenses are no longer deductible on the personal return under IRC §217. And even if the employer reimbursed you, that reimbursement is generally taxable under IRC §132(g).
The main exception is for active-duty members of the U.S. Armed Forces and certain qualifying moves for the U.S intelligence community.
For everyone else, the deduction and exclusion are suspended indefinitely under the current OB3 rules.
So if your move costs $15,000, the tax code basically shrugs and says:
“Congrats on your new job. That’s a personal expense: non-deductible.”
The one narrow area you may still rescue
There is one narrow area where you may still be able to create a real deduction: the business portion of your move.
Personal moving expenses remain non-deductible.
But, the cost of moving business property (equipment, supplies, business records) can be deductible as an ordinary and necessary business expense under IRC §162.
The “loophole” that’s actually legit
If Dr. Disney (this post is dedicated to Dr. Vu) has an S corporation and a legitimate home office before and after the move, he may be able to deduct the cost of moving business property through the S corp.
This is the key:
He are not deducting his family’s move.
He’s deducting the cost of relocating business assets used in his business
That’s a completely different story.
The example (simple numbers)
Dr. Disney is moving from Florida to DC for a new attending job.
Total moving bill: $15,000.
He also has a real home office setup for his S corp work: desk, chair, monitors, printer, files, supplies, maybe a small camera setup for a virtual consults.
Let’s say $3,000 of the moving cost is clearly tied to moving those business items.
If the S corp reimburses him that $3,000 under a written accountable plan, and he properly documents it:
the reimbursement is not taxable to him (because it’s accountable plan reimbursement, not extra wages), and
the S corp can deduct the $3,000 as a business expense.
That’s a deduction most doctors don’t realize exists.
If Dr. Disney is in the 37% bracket, $3,000 x 37% = $1,100 of federal tax savings.
That’s basically one extra Disney day with his family (because yes, everything is absurdly expensive!)
Important: What does NOT work
Here’s the trap to avoid:
You cannot just take you home office percentage and multiply it by the entire moving bill.
Example:
Home office: 20% of your house.
Move costs $15,000.
So you claims $3,000.
That sounds clean.
It also sounds like a shortcut the IRS would love to challenge if you can’t prove that the $3,000 actually tied to moving business property.
The IRS doesn’t care that his home office is 20% of his home. They care what you moved and what it cost.
What makes this strategy defensible
You need two things.
#1: A legitimate home office before and after the move
You needs a real home office for your business. This means a specific area is used exclusively and regularly for business.
#2: Clear documentation of the business portion of the moving costs
Best case: separate invoice, separate shipment, or a mover inventory that clearly identifies business items.
Good case: a reasonable allocation method he can explain and support (by weight, volume, or number of boxes), backed by mover records and receipts.
If you cannot substantiate a reasonable allocation, the deduction can be denied.
If you want this to survive scrutiny, treat it like a medical chart: clean, specific, documented.
How an accountable plan fits in
If your S corp has a written accountable plan and you follow it, the corporation can reimburse you for substantiated business expenses.
Done correctly, that reimbursement is not taxable wages.
Done incorrectly, it turns into taxable compensation.
This is why the paperwork matters.
Bottom line
The current tax code disallows the traditional moving deduction for most doctors.
But if you run a real business and you’re moving real business property, you may be able to deduct that business slice through your S corp using accountable plan reimbursement.
It won’t save your entire moving bill.
But it can rescue a meaningful chunk.
Would this still be true for an LLC?