While many people believe that there is no limit on claiming moving expenses on their personal tax return, Edmonton bookkeeping says it is a little bit more complicated than that. In fact, people need to be aware of all of the requirements that the Canada revenue agency has in place for people to claim moving expenses on their tax returns.
This can be very important because the Fraser Institute reports that the average Canadian pays 43% of their entire income in taxes. Such as income taxes, CPP, EI, GST, fuel taxes just to name a few. In fact, only 37% of the remaining amount of money that a person has leftover goes towards the basic necessities. Such as food, clothing, and shelter.
There are three things that people need to have before they can claim their moving expenses on their personal taxes. Edmonton bookkeeping says the first requirement is that a person has had to move at least 40 km closer to their place of work.
This does not mean that they have to have moved 40 km in total. But they had to move 40 km closer to their workplace. If this is not the case, they are not going to be eligible for claiming their moving expenses on their taxes. In addition to that, they must have sold their other residents in order to qualify.
Another requirement that they need to satisfy before they can claim the moving expenses on their personal tax return. Is that they moved from within Canada, to another residence within Canada. It can be in the same province, or from one province to another. But a person moving from the USA to Canada, or anywhere else in the world to Canada. Are not going to be eligible for claiming their moving expenses.
And finally, a person must not have already been reimbursed if they are going to claim their moving expenses on their personal tax return. This is from their employer, or from their corporation. As long as they have not been reimbursed, they have moved 40 km closer to work, and that they have not moved from outside the country. They will be able to claim these moving expenses on their taxes.
However, a person should also be aware that they cannot claim their entire amount necessarily. The amounts that they are eligible to claim will be based on the net income they are going to be earning from their job.
If it is a student that is moving, the amount that they can claim will be limited to any amounts that they get from a government grant that they might have. As part of being a student.
As long as a person has satisfied all of these requirements, the will be able to claim their moving expenses. And to help them figure out how much they can claim. They should keep all of their receipts, and then bring everything to Edmonton bookkeeping. And allow them to help figure out how much they can claim, and what expenses they will be able to use.
Seeing For Yourself What The Deal is?
Many people do not know all of the facts when it comes to if they can claim moving expenses are not says Edmonton bookkeeping. And while the answer is yes they can claim their moving expenses. They may not be able to claim all of them necessarily.
Or what someone might think is a valid moving expense, is not necessarily valid expense. Which minimizes the amount overall that they can claim. Therefore, it is very important that if someone is moving, and they are planning on claiming their moving expenses. This simply keeps all of their receipts and then let their Edmonton bookkeeping company help them figure out which ones are valid.
What utilizing experts will also do, is help ensure that they get the maximum amount that they can claim as possible. For example, they will be able to tell the person if they have exceeded the moving expenses that they can claim for the year. But they will also be able to know that they can carry forward the remaining moving expenses. And claim the rest of them in the following year.
This is because Canada revenue agency allows people to carry forward-moving expenses into the following year. Because of that, some people may decide to carry the expenses to the next year. Because they had less income this year then they are going to have a year. It will mean they can claim more moving expenses in the future year.
Once a person can figure out that they can claim their moving expenses, and that Edmonton bookkeeping is going to help them figure out how much to claim, and how much to claim. It just requires the person to keep all of their receipts during their move.
For instance, many people know that they can claim fuel expenses, vehicle maintenance expenses during their trip, and meals and accommodations. But they may not realize that other things are included in moving expenses. Such as the commission on a real estate broker. That they hired to sell their house after they left. This also includes the legal fees and registration fees associated with selling their house.
Another cost that many people may not understand is a valid moving expense cost. It is the cost of getting new drivers licenses, or a new vehicle permit once they have moved to their final location. They can also claim the utility connections and disconnections from leaving one residence, to arriving at another one. These are all part of the incidental costs that Canada revenue agency allows to be claimed on personal taxes.
Therefore, with so many unusual costs related to moving expenses. People should keep any and all receipts that they incurred, no matter how not related they assume them to be. So that they can end up getting the maximum amount claimed on their taxes, and not miss out on important deductions.