What's the cost of moving out of state? 5 financial tips for relocating

If you go with a full-service moving company with a packing service, they will likely include basic supplies like boxes, tape and padding in their price quote. If you plan on packing on your own and just using movers for the loading and unloading, you'll need to budget for those essential supplies. Online moving calculators can help you guesstimate what you might need.

Don't forget the hidden costs of moving. If you have pets, you may need to price a service to transport your furry family friend or find a boarding facility in your new hometown for moving day to limit anxiety for everyone. Then there's your transportation, which could include putting the cost of flights, hotels, gas and meals on your list of expenses.

2. Negotiate for a relocation package

Some companies want to make employee moves as easy as possible and offer relocation packages. These vary in structure and may include all possible costs related to a move or only cover mileage if you drive your own car. Somewhere in between are other relocation packages that may include:

• Lump-sum. You get a one-time payment from your employer.
• Direct bill. Moving companies and travel providers bill your employer for the costs.
• Reimbursement. You pay out of pocket for moving expenses and your employer reimburses you.

If you're asked to move for a new position, it's common to counter with a relocation package request. If nothing else, it's a potential jumping-off point for further negotiations.

3. Work with a tax professional on your taxes

Relocation can impact your taxes, most commonly on the state level. If you currently pay a state income tax or are moving to a state with a state income tax, you’ll likely need to file income tax returns in both states for part-year residency.¹ Calculations can get tricky, and accounting mistakes could mean fees, penalties and even interest owed in two states.

On the federal level, relocation packages are subject to federal income tax until the end of 2025. For instance, if you received a lump-sum relocation package of $15,000, your annual W-2 will show that sum as taxable income.

Even if you're the most ardent do-it-yourself tax filer, some extra help in a relocation year may be warranted to prevent missing income and running afoul of the IRS and your state.

4. Make sure you've officially moved

The to-do list for moving can feel never-ending, but you can tame it with a checklist of documents and services that need updating. After all, you haven't fully moved until you've moved everything. Consider starting a list with these tasks:

• Update your driver's license
• Register to vote in your new location
• Revise your estate planning documents
• Update your billing address with credit card issuers and loan companies
• Change your address with your health, life, renter's and auto insurance companies
  • Research and change auto insurance carriers to the new state. The cost could be substantial depending on the destination.
  • Renters insurance could be bundled with the car insurance for larger discounts.
• Make sure financial institutions and brokerage firms have your new address
• Revise your billing address with streaming TV providers
• Update shipping addresses for repeat shipments
• File an official change of address with the U.S. Postal Service

Making proactive changes could also help prevent financial issues down the line. If you have updated your information, you could miss critical tax documents for your investments and other accounts. Every state also has different criteria for what makes estate planning documents valid, so it's a good idea to run everything by your financial and legal professionals.

5. Be flexible with your moving schedule

You may be able to substantially trim the cost of moving out of state if you wait until it's not peak season. It's true: Moving during the winter months can be more cost-effective since they're slow months for moving companies.

Companies may be willing to cut you a deal to keep their trucks moving. You may also find that other discounts like coupons and special offers like free boxes or free packing can trim your bill even more. While you may experience delays due to off-season weather, a day or two in a hotel is nothing compared to possibly saving thousands. Those cost savings, especially if you're footing the bill, can help fund other financial to-dos, like saving for a child or grandchild's education or making a lump-sum contribution to your IRA.

The cost of moving out of state doesn't have to hurt

Before you tap your savings or use a credit card for a big move, consider how you can use these tips to trim your potential moving expenses and make your relocation a smooth experience. When you have a big life moment like this — moving to a new home, getting a new job or changing the size of your family — it's also the perfect time to connect with a financial advisor. They can help you budget through the transition and set up or revisit your financial plans as your life pivots.

Looking for an experienced professional to help you reach your financial goals through life's ups and downs? Follow the link below to learn about what a Citizens Wealth Advisor can offer you and your family.