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When planning to ship a car, especially over long distances, it’s common to ask whether those costs can be deducted from your taxes. Understanding the rules can help you save money and avoid mistakes when filing.
Car shipping can involve a variety of expenses, from transport fees and insurance to storage. Knowing which of these costs qualify for tax deductions, and which do not, can make a big difference in your final tax bill.
This guide explains what moving expenses are still tax-deductible in 2025 and how to maximize deductions if you’re eligible.
What You’ll Learn in This Guide
In this guide, we will answer the following questions:
When are car shipping costs tax-deductible?
What records do you need to claim shipping costs on your taxes?
What common mistakes should you avoid when claiming deductions?
Overview
Understanding Car Shipping Costs
Before examining the tax rules, it is helpful to understand the various expenses associated with shipping a car. Costs can vary significantly depending on factors such as distance, vehicle size, and the method of shipping chosen.
Here are the most common expenses:
Transport Fees
These are the main charges from the shipping company, usually based on distance and vehicle size. For example, shipping a regular sedan across the country might run between $800 and $1,500.
Costs can change based on:
Distance: Longer trips usually cost more.
Vehicle type: Bigger vehicles like SUVs or trucks often have higher fees.
Transport method: Open carriers are cheaper, while enclosed carriers cost more but offer extra protection.
Insurance Costs
This covers your car while it’s being shipped. Most companies provide basic insurance, but it may not be enough for high-value cars. Always ask what’s included and consider buying extra coverage if needed.
Fuel Costs
If you drive the car yourself or pay extra fees related to fuel during transport, these costs can add up quickly.
Customs Fees
If you’re shipping a car overseas, you may face customs charges, tariffs, or other fees. These vary by country, so research the rules ahead of time to avoid surprises.
Storage Fees
Sometimes you need to store your vehicle before pickup or after delivery, especially if there’s a delay between your move and the car’s arrival. Storage costs can add to your total.
Preparation Costs
Before shipping, you may need to prep your vehicle. This often means cleaning it, removing all personal belongings, and making sure it’s in good working condition. Many companies won’t allow personal items in the car during transport.
Tax Cuts And Jobs Act Car Shipping Deduction Changes
Car shipping costs aren’t usually deductible, but there are two main exceptions: if you’re active-duty military moving for service, or if you’re shipping a vehicle for business use. Here’s how each situation works.
Civilian Job Moves
If you’re a civilian moving for a new job or a job transfer, you cannot deduct your car shipping costs between 2018 and 2025. The Tax Cuts and Jobs Act (TCJA) suspended these deductions for most taxpayers.
Moving expenses (including car shipping) are not deductible right now.
The old “50-mile distance” and “39-week work” rules no longer apply.
Employer reimbursements are typically taxable unless you’re military.
Military Moves
Active-duty members of the U.S. Armed Forces relocating due to a Permanent Change of Station (PCS) can still deduct moving expenses, including car shipping. This rule helps reduce the financial burden of frequent moves.
Deductible expenses include:
Car shipping costs (if not reimbursed).
Travel expenses for you and your family.
Moving household goods.
No need to meet the old distance or time tests.
Business Use
If you’re self-employed or own a business and ship a vehicle for business purposes, the cost is deductible. IRS rules for deducting car shipping as a business depend on how the car is used.
Full deduction if the vehicle is used only for business.
Partial deduction if the car is used for both business and personal (for example, 60% business use = 60% deductible).
Must be considered an “ordinary and necessary” business expense.
When You Can’t Deduct
In many cases, shipping costs are treated as personal expenses and don’t qualify:
Moving for personal or family reasons.
Shipping a car to a vacation or seasonal home.
The personal-use portion of a mixed-use vehicle.
How To Claim Vehicle Shipping On Taxes
If you qualify for a deduction, either as an active-duty military member or a business owner, the key is meticulous record-keeping and using the correct IRS forms.
Keep Detailed Records
Save every document related to your car shipping, as the burden of proof is always on the taxpayer:
Invoice from the Shipping Company: This is the legal proof of the expense incurred.
Proof of Payment: Bank or credit card statements showing the transaction was completed.
Related Expenses: Keep receipts for any associated costs, such as temporary lodging required to drop off or pick up the vehicle, if those costs are also deductible under the specific IRS provision you are using.
Mileage Logs: If you drove any part of the way yourself for business, maintain a detailed log documenting the business miles driven.
Use the Right Tax Forms
Talk to a Tax Professional
Tax rules are complex and change frequently. A Certified Public Accountant (CPA) or tax preparer can ensure you comply with the current IRS regulations and help you get the maximum deduction possible for your specific situation.
Stay Organized
Use tax software or apps to scan and store your receipts electronically. Keeping all documentation in one place throughout the year simplifies the process and prepares you for the next step.
Be Ready for an Audit
While audits are rare, the IRS may review your return. Keep all records associated with your claimed deductions (receipts, payment proof, mileage logs, and copies of all shipping documents) for at least three years after filing.
Tips to Get the Most Out of Your Car Shipping Deductions
Want to make sure you’re saving as much as possible when filing taxes? Here are some easy ways to maximize your deductions if your car shipping qualifies.
1. Time Your Move Wisely
If you’re eligible for deductions, think about when you move. Sometimes it makes sense to ship your car in the same year your income is lower, so you get more of a benefit.
2. Keep Every Receipt
Don’t just track your car shipping costs. Keep records of other related expenses like travel, hotel stays, and packing supplies. The more you track, the more you can deduct.
3. Use Tools That Can Help
The IRS website, TurboTax, or H&R Block all have guides that explain what counts as deductible. They make it easier to know if your move qualifies.
4. Stay Up to Date on Tax Laws
Rules change. For example, the 2017 Tax Cuts and Jobs Act took away moving deductions for most people, except active-duty military. Knowing the latest rules helps you avoid surprises.
5. Look Beyond Car Shipping
If you’re a business owner or self-employed, you may qualify for other deductions too. Talking to a tax professional can help you find all the credits and write-offs you’re eligible for.
Myths About Car Shipping Deductions
A lot of people get confused about when car shipping costs are tax-deductible. Here are the most common myths and the truth behind them:
Myth 1: All Shipping Costs Are Deductible
Reality: Not true. Only certain situations qualify. You can deduct car shipping if it’s for business purposes or if you’re active-duty military moving under Permanent Change of Station (PCS) orders. If you’re shipping a car for a personal move, a vacation, or after selling it, those costs are never deductible.
Myth 2: You Can Deduct Moving Costs Without Meeting the Rules
Reality: The IRS is strict on this. Military members must have an official PCS order. Business owners must prove the expense was both “ordinary and necessary” for their business, and they must keep records of how much the vehicle is used for business vs. personal purposes. If you don’t meet these requirements, the deduction won’t hold up.
Myth 3: You Have to Itemize to Deduct Military Moving Expenses
Reality: This is a little tricky. Military members don’t have to itemize to deduct moving expenses. The deduction is an “above-the-line” adjustment, which means it comes straight off your gross income when calculating Adjusted Gross Income (AGI). Military personnel simply claim it using IRS Form 3903.
Final Thoughts: Shipping and Taxes
Car shipping can be a major expense, and it’s natural to wonder if you can get some relief at tax time. The reality is that deductions are limited. For most people, shipping costs won’t qualify, but active-duty military members and business owners may be able to write off some or all of their expenses. The key is knowing the rules, keeping good records, and filing with the correct IRS forms.
Ready To Make The Most Of Your Car Shipment?
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Frequently Asked Questions (FAQs)
Are auto transport costs tax-deductible for a job move in 2025?
Auto transport costs for a job move in 2025 are only tax-deductible for active-duty military personnel moving due to a permanent change of station (PCS), not for civilians.
Can I add car shipping cost to my vehicle's cost basis?
You can add the car shipping cost to your vehicle's cost basis only if the vehicle is primarily used for business purposes and the shipping expense is a necessary cost of acquiring the asset.
Does the IRS require receipts for expenses?
Yes, the IRS requires documentation (including receipts, canceled checks, or bills) to substantiate all expenses claimed on your tax return.
How far back can the IRS audit you?
The IRS can generally audit you for the last three years of tax returns, but this period extends to six years if they suspect you substantially underreported your gross income (typically by 25% or more).
