If people have moved in the past year, Edmonton bookkeeping says they typically want to know if they can claim their moving expenses. And if they can, what expenses are eligible to be claimed on their tax return.
This is very important, because the more expenses they can claim, the more they can minimize the taxes they owe at the end of the year. However, it is not necessarily a clear cut answer if whether they can claim their moving expenses or not. And while many people believe this has to do with whether they are moving for work or not. It is a little bit more complex than that.
One of the first things that they need to ensure they are doing in order to claim their moving expenses says Edmonton bookkeeping. Is moving closer to their workplace. This means that they must be moving at least 40 km closer to their place of work. And not just 40 km in total.
Therefore, if people are moving within their city. They might want to ensure that the place that they are moving to will get them 40 km closer to their workplace. So that they can claim it on their tax return.
The second eligibility requirements they must make is that they must have sold their previous residence if they owned it. If they rented, they do not have to prove anything. But even if a person was not successful in selling it at the time of their move. They need to be able to prove documentation that the did try to sell it within that timeframe.
Another eligibility requirement the needs to satisfy is that the move must be made from within Canada. It does not matter where in Canada, whether it is in the same city, province or across the entire country. As long as they are not moving from outside the country to the inside of it, it will meet this requirement.
And finally, people need to ensure that they were not already previously reimbursed for these moving expenses. Such as by an employer so that they can move closer to the job, or because they got a promotion.
Once people have satisfied these requirements. Then they will be able to claim their moving expenses. However, there is a maximum amount of moving expenses that people can claim. Related to their income that year.
However, they also can carry their moving expenses forward. So their Edmonton bookkeeping company might strategize with them. On if they should claim some moving expenses this year and then carry some forward to the next year. Or if they are reporting less than a full year of income this year. Either because they were out of work, or because the took time off to move.
The might decide that it is most beneficial for people to carry all of their moving expenses forward the next year. So that they will be able to claim as much of them as possible. In a year when they have more income.
What Expenses Are Non-Negotiable For Edmonton Bookkeeping?
While many people want to claim their moving expenses on their personal taxes says Edmonton bookkeeping. This is in order to minimize the amount of taxes that they owe the government. This is because the average Canadian pays so much already in a variety of taxes.
In fact, according to the Fraser Institute, the average Canadian pays 43% of their entire income in a variety of taxes. These taxes can include such things as GST and PST, fuel and carbon tax, CPP, and EI just to name a few.
And as a comparison, only 37% of the amount left over goes towards such basic necessities as food and rent or mortgage. With how much Canadians pay in taxes, it is very common for people to strategize on how to minimize taxes is much as possible.
And while moving expenses is a claimable expense on personal tax returns. It is not necessarily very easy to understand issue. This is why if anyone has moved in the past year, they should hire and Edmonton bookkeeping company. To help ensure that they are claiming the maximum amount that they possibly can.
This is often because people are not aware of all of the expenses that they are eligible to claim. And without speaking to a professional, may end up not getting as much benefit as the probably could with the help of an expert.
For example, while people need to sell their old residence in order to claim their moving expenses. If the made a reasonable effort to sell the there home. But was unable. All of the expenses that they incur to maintain that home while they are still trying to sell it. Can be claimed as moving expenses.
For example, the utility bills they get on their old residence for the duration of trying to sell it, property taxes and hiring things like cleaners to clean the homes that it is presentable to show to potential buyers. And hiring a landscaper to cut the lawn, or shall will the walk to ensure that it is presentable as well.
Even the cost of hiring a real estate broker to sell their old residence can be claimed. As long as they are claiming the real estate brokers commission and not the entire amount of the sale of the house. As well as any associated legal and registration fees that they incurred while selling the house.
And while this can be a very complex issue. Edmonton bookkeeping can use a simplified method to calculate this. Which equals out to be seventeen dollars per person per day for the move. Fifty-one dollars per day on meals. And forty-eight point five cents per kilometer. So if the entire amount that a person travels is a thousand kilometers, they would be able to claim four hundred and eighty-five dollars.
The thing to keep in mind with this simplified method. Is that person still need to ensure that they can prove that they did incur those expenses. By keeping a copy of their receipts.