Question

Alexis (a CPA and JD) sold her public accounting practice in Des Moines and accepted a job with the Seattle office of a national accounting firm. Her moving expenses are not deductible because she has changed employment status (i.e., went from self-employed to employee).

a. True
b. False

Answer 1

The deductibility of moving expenses is not determined by changes in employment status, but as of 2018 through 2025, nearly all moving expenses are non-deductible, except for certain military members.

Step-by-step explanation:

The statement that Alexis's moving expenses are not deductible because she has changed employment status from self-employed to employee is false. The deductibility of moving expenses is not determined by changes in employment status, such as going from self-employed to an employee, but by other factors stipulated by the IRS. Previously, the IRS allowed taxpayers to deduct moving expenses if they met certain time and distance tests. However, under the Tax Cuts and Jobs Act of 2017, moving expenses deductions for work-related moves are suspended for tax years 2018 through 2025, except for members of the Armed Forces on active duty who move due to a military order.

Answer 2

The deductibility of moving expenses is not determined by changes in employment status, but as of 2018 through 2025, nearly all moving expenses are non-deductible, except for certain military members.

Step-by-step explanation:

The statement that Alexis's moving expenses are not deductible because she has changed employment status from self-employed to employee is false. The deductibility of moving expenses is not determined by changes in employment status, such as going from self-employed to an employee, but by other factors stipulated by the IRS. Previously, the IRS allowed taxpayers to deduct moving expenses if they met certain time and distance tests. However, under the Tax Cuts and Jobs Act of 2017, moving expenses deductions for work-related moves are suspended for tax years 2018 through 2025, except for members of the Armed Forces on active duty who move due to a military order.