One of the most common questions that Edmonton bookkeeping gets from people who have moved within the past year. As to whether they can claim their moving expenses on their personal taxes or not. Any people believe that they can as long as they are moving for business. Or do not realize that moving expenses are claimable.
Therefore, people need to understand that anyone who has moved in the past year, a be able to claim their moving expenses. Even if they did not move for business. As long as they met several important criteria set out by the Canada revenue agency.
While a person does not have to move for business reasons. They must be moving a minimum of 40 km closer to where they work, or where their new job is located. So they might not be moving specifically related to their job or business. But as long as they are moving closer to it. They can claim their expenses.
Another requirement that Canada revenue agency requires of someone before they can claim their moving expenses. Is that they must have sold their old residence if they owned it. If they were renting, then it is not a concern. But if people are going to claim their moving expenses. They need to have sold the previous home that they owned.
However, there is a caveat on this says Edmonton bookkeeping. Which is if a person is unable to sell their home. That they can provide documentation that they made an effort to sell it. They will be able to claim their moving expenses.
Another eligibility requirement means that person will have to have moved within Canada. This means if people are moving from outside the country, they cannot claim their moving expenses on their taxes.
And finally, people need to not have already been reimbursed for their move. Whether this is from an employer, or from their own corporation if they are a business owner. As long as they have not already received reimbursement of their expenses. They can claim their moving expenses.
And there is a maximum amount that people are going to be able to claim on their taxes. Related to the net income that they earned in their past year. Therefore, they might want to hire and Edmonton bookkeeping company to help them figure out if this is the best year that they can claim their moving expenses.
Because Canada revenue agency also allows people to carry their moving expenses one year forward. And if they were unemployed within this past year, or took a significant amount of time off in order to move. And are not claiming an entire year of income. They may wish to only claim some of their moving expenses. And claiming the rest in the future year.
Or, they might want to claim all of their moving expenses in the future year. To be able to give them the best tax benefit. However, because this is so complex. It is best left to the experts. Which is why people should hire and Edmonton bookkeeping company to help them figure this out.
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While moving expenses can be claimed on personal taxes says Edmonton bookkeeping. People should not make assumptions about what expenses are claimable, and what expenses are not. The reason why is because there may be some surprising expenses that are allowed. Or some expenses that people might think are claimable when they are not.
For example, many people understand that they can claim the fuel that they pay for during their move, the meals that they eat along the way. As well as accommodations they stay and if they have to stay overnight somewhere during the move.
However, what people might not understand is they can also claim vehicle expenses, such as tire changes, any required oil changes, or if they needed to have a mechanic look at their engine, or replace parts. Any vehicle expenses they incur should have receipts kept.
People can also claim temporary living expenses. Whether these temporary living expenses were incurred because they needed to vacate their home early before they started their move. Or if they had an emergency along the route during the move. That forced them to stay in a hotel for a couple of days. Or even if people got to their new home, and were not able to take possession of their home immediately.
Edmonton bookkeeping says people need to be aware however that while they can claim temporary living expenses. They are limited to a maximum of fifteen days. That they can claim, so they need to be careful not to try to claim or than that.
Even some surprising costs such as utility connections and disconnections that they incurred from leaving one place and coming to another one. Or other incidental costs such as the cost of getting new drivers licenses, or provincial identification cards. With their new address on them.
If a person was unable to sell their previous residence before they moved. And they have reasonable documentation showing that they tried. The might incur maintenance costs. Such as property taxes, utility bills, as well as things like hiring a landscaper to come in and mow the lawn, or shovel walks before their home sells.
Even the cost of hiring a real estate broker can be claimed says Edmonton bookkeeping. In the form of their commission, and the legal fees associated with selling their home.
It is very important that people either keep the receipts that they have during their move. Or that the scan the receipts and keep the scans. Because Canada revenue agency may require to see them. So being able to prove that they actually did incur the costs that they are claiming is very important.
This is a complex issue, that in order to ensure that people are getting the maximum benefits. This means that they should hire and Edmonton bookkeeping company to help them figure out what they can claim, so that they can minimize the taxes that they owe the government as much as possible.