Tax Deductions Moving Company Owners Often Miss

Tax season isn't anyone's favorite time of year, but for moving company owners it's especially painful. The business is complex — heavy equipment, seasonal labor, fleet operations, multiple jurisdictions — and the tax code is dense enough that legitimate deductions get overlooked constantly.

I'm not a CPA and this isn't tax advice. What I can do is flag the deductions that moving company owners tell me they missed in prior years, so you can ask your accountant the right questions before April.

Vehicle and Equipment Deductions

Section 179 and Bonus Depreciation

When you buy a truck, trailer, or major piece of equipment, you often don't have to depreciate it over 5–7 years. Section 179 allows you to deduct the full purchase price in the year you buy it, up to a limit ($1,080,000 in 2022). Bonus depreciation lets you deduct 100% of qualifying assets as well.

This applies to:

• Trucks (new and used, if new to your business)
• Trailers and liftgates
• Forklifts and warehouse equipment
• Computers, tablets, and office furniture

The distinction between Section 179 and bonus depreciation matters for your specific situation — talk to your CPA about which is better for your tax year. But the bottom line is: if you bought a truck this year and your accountant is depreciating it over five years, ask why.

Actual Vehicle Expenses vs. Standard Mileage

For your personal vehicle used for business (driving to job sites, meeting customers, picking up supplies), you have two options:

• Standard mileage rate: 58.5 cents per mile for the first half of 2022, 62.5 cents for the second half
• Actual expenses: Gas, insurance, maintenance, depreciation — pro-rated for business use percentage

For company trucks, you can't use the standard mileage rate (it's only for vehicles under a certain weight and must be elected from the first year of use). But for your personal car used for business, run the numbers both ways. Owners who drive 15,000+ business miles per year often find actual expenses are higher.

The commonly missed piece: Tracking mileage in the first place. If you don't have a mileage log, you can't claim the deduction. Use an app — MileIQ, Everlance, or even a simple spreadsheet — and log every business trip.

Home Office Deduction

Many moving company owners run administrative operations from home, especially in the early years or during off-season months. If you have a dedicated space used exclusively for business, you can deduct it.

Two methods:

• Simplified: $5 per square foot, up to 300 sq ft ($1,500 max deduction)
• Regular: Calculate the percentage of your home used for business and deduct that percentage of mortgage/rent, utilities, insurance, and maintenance

The key word is "exclusive." A kitchen table where you do estimates in the evening doesn't count. A spare bedroom that is your office and nothing else does count.

This deduction is missed often because owners assume having a commercial office disqualifies them. It doesn't. If you also work from home regularly (evenings, weekends, off-season), a qualified home office deduction may still apply.

Software and Technology

Every subscription you use for business is deductible:

• Moving company software and CRM subscriptions
• Accounting software (QuickBooks, Xero)
• Payroll services
• Website hosting and domain fees
• Phone and internet service (business portion)
• Cloud storage and backup services
• GPS and fleet tracking subscriptions

These individually small amounts add up. A typical moving company might spend $500–$1,500/month on software and technology. That's $6,000–$18,000 annually — all deductible.

Commonly missed: Personal cell phone used for business. If you use your phone 60% for business, 60% of the bill is deductible. Same for home internet if you work from home.

Retirement Contributions

This is the big one that owners of small moving companies overlook. If you're a sole proprietor or LLC, you can contribute to:

• SEP IRA: Up to 25% of net self-employment income, max $61,000 for 2022
• Solo 401(k): Up to $20,500 employee contribution plus 25% employer match, totaling up to $61,000 (or $67,500 if over 50)

These contributions reduce your taxable income dollar for dollar. An owner earning $200,000 who contributes $40,000 to a SEP IRA saves roughly $10,000–$14,000 in taxes depending on their bracket and state.

The SEP IRA is especially attractive because you can make the contribution up until your tax filing deadline (including extensions). That means you can decide in October 2023 how much to contribute for 2022 based on your actual profits.

Ask your CPA about this. Many moving company owners who should be sheltering $30K–$50K/year in retirement accounts are contributing nothing because nobody told them the options.

Insurance Premiums

Health insurance: If you're self-employed and not eligible for a spouse's employer plan, you can deduct 100% of health insurance premiums for yourself, your spouse, and dependents. This is an adjustment to income, not an itemized deduction — it reduces your AGI even if you take the standard deduction.

Business insurance: Auto liability, general liability, cargo insurance, workers' comp, umbrella policies — all fully deductible as business expenses. Make sure your accountant has records of every policy.

Education and Professional Development

• Industry conferences and trade shows (including travel, hotel, and meals at 50%)
• Training courses for you and your employees
• Industry association memberships (AMSA, state moving associations)
• Professional publications and subscriptions

If you sent a crew lead to a training seminar or attended the AMSA annual conference, those costs are deductible — including airfare, hotel, and 50% of meals.

Commonly Overlooked Operating Expenses

These are legitimate business expenses that owners forget to track:

• Uniforms and branded clothing — for you and your employees
• Packing materials — blankets, pads, boxes, tape, shrink wrap
• Truck washes and detailing — maintaining your fleet's appearance
• Parking and tolls — both for daily operations and business travel
• Bank fees and credit card processing charges — the 2.5–3% you pay on every credit card transaction is fully deductible
• Bad debt — uncollected invoices from customers who didn't pay
• Charitable donations — if the business donates to local causes
• Business gifts — up to $25 per recipient (referral thank-you gifts, realtor appreciation)

Track these throughout the year. A shoebox of receipts in April means you'll miss half of them. Use your reporting tools and accounting software to categorize expenses as they occur.

What About Hiring Tax Credits?

The Work Opportunity Tax Credit (WOTC) provides a credit of up to $2,400–$9,600 per eligible employee for hiring individuals from targeted groups: veterans, long-term unemployment recipients, ex-felons, and others.

Given the moving industry's constant hiring needs, WOTC can generate meaningful credits. The catch: you have to apply for certification before the employee starts or within 28 days of their start date. Most small companies miss this deadline because they didn't know it existed.

Ask your payroll provider — many offer WOTC screening as part of the onboarding process.

The 20% Qualified Business Income Deduction

If your moving company is a pass-through entity (sole proprietorship, partnership, S-corp, LLC), you may be eligible for the Section 199A deduction — 20% of qualified business income. For an owner with $150,000 in net business income, that's a $30,000 deduction.

There are income limits and restrictions, but most moving company owners with taxable income under $340,100 (married filing jointly) qualify. This deduction expires after 2025 unless extended by Congress, so take advantage of it while it's available.

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