One of the most common questions that Edmonton bookkeeping gets from people who have moved. Is if they can claim their moving expenses on their personal taxes. This is very significant in helping people minimize the taxes that they owe the government. Particularly if they have moved in the past year.
And regardless of the reason why they are moving. It may be possible for people to claim these expenses on their personal taxes. As long as they have fit some specific criteria with their move.
The first thing that needs to be satisfied, is that they have moved at least 40 km closer to their place of work. Whether they are taking on a new job, and are moving closer to that new job. Or an employee simply wants to move closer to work, so that they spend less time commuting to their job. So that they can spend more time with their family.
However, there is a condition of that, they must have sold their old residence. If they actually owned it in the first place. So if they have not sold those residents, they may not be able to claim their moving expenses on their tax return.
There is an exception that Canada revenue agency will allow, however. If people end up trying to sell their residence but are unable. As long as they are able to show with reasonable documentation. That they tried to sell the property. Then that will satisfy this condition.
The second condition they need to satisfy is that they have to have been moving from one place within Canada to another. It does not matter where in Canada they are moving from or moving to. Whether it is in the same city, the same province, or moving from any province or territory to another province or territory. As long as it is within the country, that will satisfy this condition.
And finally, in order to be able to claim their moving expenses on their personal taxes. They cannot have been reimbursed through any other means. Whether this is from their employer or their own corporation. As long as they not been reimbursed for their expenses. They can claim them on their taxes.
While there is going to be the maximum amount they can claim. This is best left calculated to an Edmonton bookkeeping company. Because the amount that they can claim is related to their specific income within that year.
And Canada revenue agency will allow people to carry forward their moving expenses into the next year. So if they stand to make more money in the future year. Or if moving made them take time off so that they are not claiming a full year of income. It may be in their best interest to claimants in the future year. So that they can claim more of the expenses.
It can be a complex issue. Which is why people should hire and Edmonton bookkeeping company. And let them do the calculations. So that they can end up claiming the most that they possibly can from their moving expenses.
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The reason why many people want to know if they can claim their moving expenses says Edmonton bookkeeping. And that is to minimize the amount of taxes that they owe the government at the end of the year. According to the Fraser Institute, the average Canadian pays 43% of their income in a variety of taxes.
These taxes can come from a variety of sources including CPP, EI, GST, and PST, as well as fuel tax just to name a few. In fact, taxes make up so much of a person’s income, that out of the remaining 57%, only 37% of the remaining total goes towards things like their food, and shelter.
Anything that a person can do to minimize the taxes that they owe at the end of the year can be very beneficial to them. Which is why they often want to know if they can claim their moving expenses says Edmonton bookkeeping.
And while it is possible for people to claim their moving expenses. This does not mean that every single expense that they can incur can be claimed. But, some people can be surprised by what is claimable.
Making it very important for people who are moving to keep every single receipt during the entire movie. So that they can end up claiming as much as they possibly can. To minimize as much taxes as they can on their tax return.
For example, if they were unsuccessful in selling their old residence. And they have to maintain it until it is sold. All of the maintenance costs are deductible as moving expenses.
This means the property taxes on the old location, all of the utilities that they incur while they are selling it. And hiring things like cleaners to clean the house, or landscapers to mow the lawn. Are all considered moving expenses until they sell their property.
In fact, if they had to hire a real estate broker to sell their old location. They can claim their real estate brokers’ commission, as well as any fees associated with the sale of their property. Including legal fees and registration fees.
People can even claim incidental costs, which include things like utility connections and disconnections. Or the cost of getting new documents with their new address on it, such as peoples driver licenses.
Even temporary living expenses can be claimed. As long as it does not exceed fifteen days’ worth of expenses. This would cover situations such as having their house packed up a day before they are scheduled to move to ensure that it can get done in time. And then needing to stay in a hotel, because they have no belongings in their house.
Or, they can claim living expenses if when they get to their new home, it is not ready for them to move in yet. They can stay up to fifteen days a total of living expenses. And even if people have to put their belongings in storage. Because the moving trucks have arrived, but their home is not ready. This is also claimable.
By understanding what expenses people can claim on their taxes is very important. But they should always ask an expert such as an Edmonton bookkeeping company. To help them figure out how much they can claim, and what expenses they have that are actually claimable.