Many people want to know if they can claim their moving expenses on their personal taxes according to Edmonton bookkeeping. So that they can minimize any taxes that they have to pay at the end of the year.
This is important because the average Canadian pays 43% of their entire income in taxes. Making it very important to minimize that whenever possible.
However, if a person is eligible to claim their moving expenses. As well as understanding what moving expenses they can claim is a little bit more complex to understand. This often requires hiring and Edmonton bookkeeping company to help people figure it out. Because it is not a clear answer.
For example, for all Canadians who are eligible proclaiming their moving expenses on their personal taxes. There is a maximum amount that they can claim. That is going to be limited to the net income they are going to be earning.
If they are a student that is moving in order to be closer to their school. The amount that they can claim is going to be limited based on if they are receiving government grants. And how much they might be receiving in those grants.
However, before a person starts calculating their maximum amount of moving expenses they can use. The first need to determine if they even meet the eligibility requirements to be able to claim those expenses in the first place.
There are three different criteria that people need to meet in order to be able to claim their moving expenses. The first one is that they need to ensure that they are not being reimbursed for their moving expenses from another source. Whether that is from their employer. Or if their corporation is reimbursing them. They must not receive any reimbursement in order to meet the eligibility requirements.
The next requirement is that they must be moving from within the country, to another location within the country. Therefore, people moving from outside of Canada to anywhere in Canada are not eligible.
And finally, people must be moving 40 km closer to their place of work. Not to be confused with moving 40 km from one residence to the other. And also, if a person has owned their place of residence. This needs to be sold. For the meets their eligibility requirements.
However, that last requirement does have a caveat. Canada revenue agency allows people who have reasonable documents showing that they tried to sell their previous property. But have been unsuccessful as of yet.
Once a person has met all of the requirements. They are able to claim at least a portion of their moving expenses on their personal taxes. If not all of their expenses. But the next thing they need to understand. Understanding which of the expenses they have incurred. Can be used on their personal tax return.
There may be a wide variety of expenses that are allowed or not. Which is why it is very important for people to hire their Edmonton bookkeeping company. So that they can help people navigate this complex issue. So that they end up with the best claim on their personal tax return.
How Can We Help Your Edmonton Bookkeeping?
Understanding what moving expenses can be claimed says Edmonton bookkeeping. As well as how much can be claimed can be complex. Many people try to understand everything that they can claim. However, an effective solution is for people to keep every receipt they incurred during their move. And then hire a bookkeeper to help them figure out what they can claim.
While some moving expenses that people incur are well-known. Such as travelling costs such as fuel, accommodations, and meals while they are moving.
Some of those expenses are less well-known. Such as repair or tire costs that they incur while traveling. Therefore, it is the best advice for people to keep all of the expenses that they incur while they are moving. So that they can ask their Edmonton bookkeeping company about which ones are valid.
Another cost that many people may not be as aware of. Is a temporary living expense. Such as if the home that they are moving into is not ready for possession once they arrive. They may stay in a temporary residence such as a hotel or air B&B. Until there home is ready for possession.
However, people need to keep in mind that this does have a limit of fifteen days of temporary living expenses. Therefore, they need to be careful that they are not trying to claim more than the fifteen days that they are allowed.
Other costs that many people are not aware of can be claimed. Will be the costs associated with maintaining their previous residence. If they were unable to sell it. They must also be able to show documentation that they tried selling the property but were unable to.
But while the still own the home and are trying to sell it. Might incur a number of expenses. Such as cleaners, landscaping, and utilities. And all of these expenses can be claimed.
Even once a person has moved, some of the costs that they incur as part of setting up their new residence can be counted. Such as utility connections, getting a new driver’s license, or needing to purchase a vehicle permit. These are all counted as incidental costs. And can be claimed as moving expenses. As long as people have not maximized their entire claim.
The best words of advice that people can take away is that they must keep all of their receipts. So that if Canada revenue agency audits their tax return. They will be able to show them all of the proceeds associated with all of their expenses.
This is true even if the Edmonton bookkeeping company has utilized the simplified method used for calculating the costs of moving. So that even if they did not use the exact receipts. A person can still prove to Canada revenue agency that those expenses were in fact incurred.
Understanding moving expenses is complex and times. And a great reason for people to hire Edmonton bookkeeping to help them with their personal taxes at the end of the year.