If people have moved to during the past year, they often ask their Edmonton bookkeeping company if they can claim these moving expenses. However, it is a bit more of a complex issue than a simple yes or no.
There are certain requirements that people must meet before they are going to be able to claim their moving expenses on their personal taxes. The first one being they need to ensure that their move has brought them 40 km closer to their place of work.
Many people assume this means that the entire distance of the move needs to be 40 km. They actually have to be at least that distance closer to their workplace in order to claim this amount.
They also need to ensure that they have sold their old residence in order to claim the moving expenses. However, if they have been unable to sell their home. As long as they are able to show reasonable documentation proving that they have tried. Canada revenue agency will allow them to claim these expenses if they have tried to sell their home.
People also need to ensure that they are moving from within Canada. Because people who are coming from out of country, are not going to be able to claim those moving expenses.
And finally, people need to ensure that they are not already getting reimbursed. Such as from their company to move that distance. Or if they own corporation, and pay themselves back through that corporation.
Once people meet these requirements. Then they will be able to claim some or all of their moving expenses to a maximum amount. This maximum amount is limited to the net income they make in a single year.
And while it is going to be limited to their income. Canada revenue agency also allows people to carry forward these expenses to the next year. Therefore, if they have made less money in this year than they stand to make in a future year. It is recommended that people hold off on claiming their moving expenses until that future year.
Even students who have moved in order to be closer to their school will be able to claim their moving expenses. And the maximum amount that the students are going to be allowed will be limited to whether or not they have received a government grant.
It is very important that people have kept all of their receipts in order to be able to claim these moving expenses. Even if the Edmonton bookkeeping company that they have hired are going to use the simplified method. Which allows a certain amount of money per person per day. As well as an allowance per day for meals.
Even if they have used this simplified method. They still will need to prove to Canada revenue agency that they have incurred those costs. Which is why they need to ensure that they have kept their receipts. Or a copy of those receipts.
This can be a complex calculation. This is why it is most beneficial for people to hire and Edmonton bookkeeping company to help ensure that they are claiming the most money that they possibly can on their tax return.
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Being able to claim moving expenses on a text turn is very important to many people says Edmonton bookkeeping. Because the average Canadian pays so much of their income already in taxes.
According to the Fraser Institute, the average Canadian is paying approximately 43% of their income in a variety of taxes. Including CPP and EI, as well as things like fuel tax and GST. In fact, this is such a large amount that they typically spend only 37% of what is remaining on basic necessities such as shelter and food.
Being able to claim the maximum amount possible can help minimize the taxes that they owe. However, people may not be aware of all of the expenses that they can claim. Which is why it is very beneficial for people to hire and Edmonton bookkeeping company to help them understand what expenses they can claim.
People should ensure that they are keeping all of their receipts, or are scanning all of their receipts digitally. So that they do not end up discounting an expense that might end up being valid.
While many people are aware that they can claim their fuel costs, meals as well as accommodations during their move. There are many other expenses that are valid. That many people might not think of initially.
If people need to purchase a different sort of insurance for their journey, that insurance can be claimed as a moving expense. As well as if they needed to replace tires while they were on their journey.
Even the expenses that related back to their old residence can be claimed. If they were unable to sell their home. And they have documentation showing that they tried to sell it.
These expenses could be things like having to hire a cleaner or landscaper to maintain the house so that it is in good condition to sell. As well as expenses like property taxes, and utility bills.
People can even claim the commission amount of a real estate broker. If they needed to hire one to sell their old home. Including things like their legal fees, and registration fees connected to the sale of their home.
Even incidental costs can be claimed as moving expenses. Which means things like paying for new drivers licenses, or new provincial identification cards with their new address on it. The cost of a vehicle permit that they might need for their new residence. And even utility connections and disconnections can count as a moving expense.
Because there are so many unusual costs that many people might not associate with moving expenses. This is the exact reason why people should be hiring an expert, and get an Edmonton bookkeeping company to help them figure out what moving expenses they can claim.
By working with an expert, people can ensure that they are getting the maximum amount that they can claim on their personal taxes. So that they can minimize the taxes that they owe at the end of the year.