The reason why many people wonder if they can claim their moving expenses says Edmonton bookkeeping. Is in order to minimize the amount of taxes that they have to pay on their personal tax return. This is extremely important because the average Canadian pays a significant amount of their wage in taxes.
According to the Fraser Institute, a typical Canadian ends up paying 43% of their entire income in taxes including fuel taxes, GST, income taxes and CPP, and EI just to name a few. In fact, this is such a huge amount of a person’s entire wage. That by comparison, out of the remaining amount of money that a person earns. 37% of it goes towards basic necessities such as shelter, food, and clothing.
Therefore, it is a very common question that people have. Is what can they claim on their personal taxes that can help minimize the income tax that they end up paying. If they have moved in the previous year, they often want to know if they are eligible for claiming their moving expenses. And if so, how much they can claim, and what expenses specifically they can utilize.
The first thing that they need to understand, is that they are only able to claim moving expenses if they meet three specific criteria. If they meet these eligibility factors, then they will be able to claim some if not all of their moving expenses.
The first requirement they must meet is that they have to be moving 40 km closer to their place of work. This is not 40 km in total. In the distance between one house to the other. But actually 40 km closer to their place of work. If they are moving 40 km closer. They need to ensure that they have either rented the previous place that they lived. Or that they have completely sold their residence if they owned it.
However, there is a concession to that. And Canada revenue agency will count as the requirement for filling. If a person has not actually sold their property yet. Have sufficient documentation showing that they tried to sell their property were unsuccessful.
The second eligibility requirement says Edmonton bookkeeping is that they must meet is that they have to be moving from a place in Canada to another place in Canada. Meeting people coming from any other country not eligible to claim their moving expenses.
And finally, the last eligibility requirement that people must fulfil is that they are not going to be getting reimbursed for their travel by any other method. Whether that is the work that is reimbursing them. Or if they are a business owner, that they are getting reimbursed by their corporation.
If people need to find out if they meet the eligibility requirements. Or if they know they do, but they need help in figuring out which moving expenses they can utilize. They should hire Edmonton bookkeeping in order to help them calculate their moving expenses. And complete their tax return. So that they can end up with the biggest tax benefit for their moving expenses.
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If people have made a move within the last year, Edmonton bookkeeping says one of the most common questions that they get. Is asking if they can claim the expenses on their personal tax return. And while the answer to the question is yes many moving expenses can be used. It can be a little bit more complex. Especially calculating the maximum amount that they can claim.
Which is why it is important to hire an expert. So that they can claim the maximum amount that they can. And that they are using all of the applicable expenses that they are able to.
For example, if a person has moved towards the end of the year. And they do not have a full year of income. Canada revenue agency allows a person to carry forward to their moving expenses into the following year.
So that they might find out from their Edmonton bookkeeping company that they are going to be in a better position to move their moving expenses forward a year. So that they can increase the amount that they can claim. once they have a full year of income to utilize.
They can also find out what expenses are eligible to be claimed. Because while some expenses are commonly understood. Such as the fuel that they use while they are moving. Or their meals and accommodations that they need. Many people may not understand that they can make claims such as a different kind of insurance that they may need to have to drive that distance. Or replacing tires can also be a claimable expense.
Another expense that many people may not realize is something that they can claim. Are all of the maintenance expenses of their previous residence. If they were unable to sell it before their move date.
Expenses such as property taxes, utilities, or landscaping. Can be claimed as a moving expense. If a person is able to show documentation that they tried to sell their property. But were unsuccessful and now need to maintain the property. Until they are able to sell it.
Even if they hire a real estate broker to help them sell their previous residence. They are able to claim that brokers commission, as well as all of the fees associated with the sale. Including legal fees and registration fees for example.
It is very important that people understand that they need to keep their receipts, however. Because if Canada revenue agency audits them. They are going to need to provide receipts whether they have claimed their moving expenses traditionally. Or even if they have used the simplified method that Canada revenue agency allows.
As long as they keep their receipts, and hire and Edmonton bookkeeping company to help them calculate what expenses can be claimed. That can allow a person who has moved to get the best tax benefit from incurring those expenses.