The reason why people would want to claim their moving expenses says Edmonton bookkeeping. Is to minimize the taxes that they have to pay to the government at the end of the year. And while many people want to be able to claim these expenses. Just because they have moved, does not mean that they are eligible.
There are four different eligibility requirements that will determine if people can claim their moving expenses or not. The first one is that they must move from somewhere inside of Canada, to somewhere else within Canada.
It does not matter if it is in the same city, same province, or across the entire country. They must not be coming from outside the country in order to claim these expenses.
The next eligibility requirement is that people cannot have been reimbursed for this move through other means. Whether it is from their former or current employer. Or if they are business owners and to reimburse themselves through their corporation. If they have been reimbursed at all, they cannot clean these expenses on their personal tax return.
The third eligibility requirement is that people must be moving a minimum of 40 km closer to their place of work. This does not mean that the entire movement must be 40 km in total. But that they actually have to be getting closer to their work.
And finally, Canada revenue agency requires people to have sold their old home if they owned it. Before they can claim their moving expenses. However, the Canada revenue agency also recognizes that it may be difficult to sell home within a specific time frame. Especially in certain economies.
Therefore, people need to show documents that they did, in fact, try to sell their homes. But were unsuccessful. As long as they can provide these documents to their Edmonton bookkeeping company. They will be able to claim their moving expenses.
Once people have met their eligibility requirements. They need to ensure that they have their receipts for all of their moving expenses. It can be difficult to keep track of all receipts. But Canada revenue agency may require seeing them in the future. So it is important that people keep those receipts.
However, keeping them does not mean they actually have to have a physical copy. It can be far more advantageous. For people to scan in their receipts digitally. So that they do not have to keep a physical copy.
Canada revenue agency also has a simplified method that can help people simplify their moving expenses. Which is seventeen dollars per person per day in moving expenses? Fifty-one dollars per day in meals, and charging forty-eight point five cents per kilometer that they have moved.
The important thing to note here says Edmonton bookkeeping. Is even if they are using the simplified method. They still need to ensure that they can prove those costs were incurred by keeping their receipts or keeping scans of those receipts.
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The average Canadian pays approximately 43% of their total income in a variety of taxes says Edmonton bookkeeping. Which is why many people want to claim their moving expenses on their personal taxes.
Any expenses that they can claim that can help them minimize the taxes that they owe the government can be very beneficial. However, understanding what expenses are allowed, expenses are not allowed. And the maximum amount that they can claim may be quite complicated.
This is why people who have moved and want to claim those moving expenses on their taxes. Should contact their Edmonton bookkeeping company. To help them navigate this complex issue.
In fact, there is a maximum amount that people can claim in their total moving expenses. And this is directly related to their income. Which is why it is often best to leave this calculation to the professionals.
Even if students are moving to be closer to their school. They have a maximum amount they can claim. Related to a number of issues. Including what their tuition is, if they received any scholarships and if they have received a government grant.
The expenses that they can not claim the also be very surprising. And if people are only keeping the receipts that they think are claimable. They might end up not being able to claim is much as they have been able to. If they had kept all the receipts.
Some surprising costs that people may not realize they can claim would include what are called incidental costs. And some examples of incidental costs would be utility connections as well as disconnections. As well as things like the cost of obtaining new documentation with their new address on it. Such as a driver’s license, a provincial identification card. Or if they need to pay for a vehicle permanent in their new residence.
Other surprising moving expenses that they can claim would be temporary living expenses. And while people can only claim up to fifteen days of temporary living expenses. These are expenses that people incurred perhaps well before or well after they moved. Such as they needed to pack up their home three days before they moved because that was what was available to the moving company.
But they cannot live in their house with anything in it. So they had to stay in a hotel for three days before they moved. Or, this might relate back to people arriving at their new home, only to realize it is not ready for possession for a week. Therefore, they would need to stay in a hotel or motel and buy food in a restaurant.
By understanding all of the various costs that they can claim can help ensure that people are claiming as much as they possibly can in moving expenses. However, it may be difficult or complex for people to understand on their own.
By hiring and Edmonton bookkeeping company. People can ensure that they are doing the difficult job of understanding what moving expenses they can claim. And how much a person can claim. So that they can get the best benefit on their taxes.