If people end up moving during a year, Edmonton bookkeeping says they frequently ask if they can claim their moving expenses. Especially if they are moving for work-related purposes.
However, that there moving for work is not what will allow them to claim those expenses on their personal taxes. There are other requirements that will allow them to claim those moving expenses. So understanding what those requirements are is important.
One of the first things that Canada revenue agency will require in order to claim those moving expenses. Is that they have moved at least 40 km closer to their place of work. This can be work that they are already working at. Or if they have taken a promotion, or started a new job.
People also need to ensure that if they owned their previous residence. That they needs to have sold it before they can claim their moving expenses. However, Canada revenue agency also recognizes that it may be more difficult to sell home. Especially in certain markets. So they have allowed a caveat.
As long as people can show documentation that the made a reasonable effort to sell their home. But were unsuccessful, they will be able to claim their moving expenses.
Another requirement that they must meet in order to claim their moving expenses. Is that they are moving within Canada. People moving from a foreign country will not be able to claim this move on their taxes. And it does not matter if it is within the province, or across many provinces. As long as it is domestic, they are eligible.
And finally, as long as people are not getting reimbursed for their moving expenses, they will be able to claim them on their personal taxes.
As long as people meet these eligibility requirements. Then they are going to be able to claim some if not all of their moving expenses. However, there is a maximum amount that people will be able to claim. Which is limited to the net income that they make.
However, it is also possible for people to carry forward their moving expenses into the next year. So it might be a strategy that they can come up with along with their Edmonton bookkeeping company. On if they are going to claim some moving expenses this year, and some in the next.
Or if they are going to strategize carry forward all of the moving expenses into the next year. Because the will potentially make more money in the future year. Which will allow them to claim more of the expenses?
Even students who are moving because they need to be closer to their school can claim moving expenses. and this amount is limited to the amount that they receive in Government grants. If they receive any grants.
This can be a complex issue. And there can be some strategy involved. Which is why if anyone is planning on claiming their moving expenses. They should hire and Edmonton bookkeeping company to help them figure out not only if they can, but how to ensure that they can claim the maximum amount.
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The reason why many people are interested in whether they can claim moving expenses are not says Edmonton bookkeeping. Is because the more expenses they can claim on their personal taxes. The more taxes they can save themselves.
This is important, because according to the Fraser Institute. The average Canadian pays 43% of their entire income in a variety of taxes. These taxes include things like CPP and EI. But they also include things like GST and fuel tax just to name a few.
In comparison, the remaining amount left over, only 37% goes to the average Canadians basic necessities such as food, clothing, and shelter.
Since Canadians spend so much in taxes. Minimizing the taxes wherever possible is very important. If people qualify for claiming their moving expenses. They may find a lot of value in hiring and Edmonton bookkeeping company. So that they can claim the most expenses possible.
This is because there are a lot of moving expenses that are not immediately obvious. That can help ensure that people are able to claim the maximum amount possible.
For example, people may not realize that they can claim the cost of hiring a real estate broker to help them sell their previous residence. This is especially if they were not able to sell it before they had to move. This includes the real estate brokers’ commission. As well as the legal fees and registration fees associated with the sale of their house.
And if they did not sell their home before they left, the cost of maintaining it until the time that it did sell can be included in their moving expenses. This includes things like the property taxes, utility bills and even paying for the maintenance of the lawn, or shoveling the sidewalks in the meantime.
People often are aware that they can claim travel expenses such as the cost of gas, meals, and accommodations if they need to stop along the way. But some travel expenses might be overlooked. Such as if they need to purchase different insurance for the trip. If they needed to replace tires along the way, or if they had to hire a mechanic to help fix an engine problem.
A great rule of thumb for many people to follow. Is to simply keep all of the receipts that they generated during their move. And then letting their Edmonton bookkeeping company figure out if it was a valid moving expense or not.
If they only kept the receipts that they thought were important. They might be costing themselves a lot of expenses that they could have used. But are not able to since they do not have the receipts.
This is why it is extremely important for people to hired Edmonton bookkeeping companies to help them ensure that they are claiming the most that they can on their personal taxes.