It can be very beneficial for people to be able to claim moving expenses on their personal tax return says Edmonton bookkeeping. Because that will help minimize the taxes that they owe the government at the end of the year.
However, while the moving expenses do not necessarily need to be related directly to moving for business purposes. There are several requirements that the move must satisfy. In order to claim those moving expenses on their tax return.
The move must be from within Canada, to another place within Canada. And it does not matter if it is in the same city, the same province or not. As long as it is a domestic move, that will satisfy one of the requirements.
The move must also bring a person at least 40 km closer to their work. Whether it is a place that they are already working in, if they received a promotion, or if they have started a new job. If they are not at least 40 km closer to their place of work. They are not going to be able to claim those moving expenses.
They also need to ensure that they are not already getting reimbursed for those moving expenses. Such as their workplace reimbursing them for the move, as part of their promotion.
And finally, Edmonton bookkeeping says that people need to ensure that they have sold their previous home if they owned it. And while Canada revenue agency has a caveat. That says as long as they made a reasonable effort to sell their home. They can claim these moving expenses. But they do needs to have documentation of the fact that they try to selling their home.
Once they have met these requirements. Then people will be able to claim the moving expenses on their personal taxes. To a maximum amount. This maximum amount is related to their net income. Therefore, if a person was out of work in that year, or took time off for the move. It may not be the most advantageous year to claim their moving expenses.
Because Canada revenue agency allows people to carry forward their moving expenses to the following year. They should discuss with their Edmonton bookkeeping company if it is most advantageous to claim the moving expenses this year or carry it forward to a future year. Where they might be able to claim more expenses because they will be making more money.
Even students who have moved in order to be closer to their school will be able to claim these moving expenses. But it is also limited to a maximum amount based on if they have received any Government grants.
This is a much more complex issue than many people assume. Which is why anyone who is thinking of claiming their moving expenses on their income tax. Should hire an Edmonton bookkeeping company. Therefore, they will know that an expert is helping them claim as many expenses as they possibly can. To get the best benefit possible.
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The reason why many people want to claim their moving expenses if they possibly can say Edmonton bookkeeping. Is because that can help keep the taxes that they owe the government at the end of the year as low as possible.
For example, not only is the highest taxable amount in Alberta 48%. The Fraser Institute also did a study that found that the average Canadian pays approximately 43% of their entire income in a variety of taxes.
These taxes can include things like CPP, EI, and income tax. As well as PST, GST and fuel tax as well as carbon tax just to name a very few taxes that they pay.
In comparison, the average Canadian pays only 37% of the amount that is leftover on their basic necessities including the mortgage or rent that they pay and the food that they eat.
With how disparate this is. The more people can minimize the taxes that they pay, the better they are going to be. Because they were be able to keep that money for themselves says Edmonton bookkeeping.
However, not only is it a complex issue in understanding if they are eligible to claim moving expenses on their taxes. There is a maximum amount that they can claim, and it is a bit complex to understand which moving expenses are even eligible to be claimed in the first place.
While many people understand that they can claim their travel expenses including fuel, meals, and accommodations. They may not realize that there is a wide array of other expenses that they are going to be able to claim as well. Including having to purchase different insurance for the move, buying new tires, especially if one fails on the journey. Getting an oil change, or paying for a mechanic to look at their engine if they are having engine problems.
Other expenses that people may not be aware of, is that they can claim temporary living expenses. Outside of needing accommodation while they are traveling. For example, if people need to get out of their homes their packers can pack up the home. But this is going to happen three days before the move. Those three days of living in a hotel can be claimed as a living expense.
However, people can claim only a maximum of fifteen days of living expenses. So they need to be very careful of not going over that amount.
Some other moving expenses that people may not think of can be things like incidental costs, such as utility connections and disconnections. As well as having to purchase new documentation. Such as updating their driver’s license with their new address.
If they were unable to sell their previous residence before they moved. All of the maintenance costs may be deducted as moving expenses as well. Including property taxes, utilities, and maintaining the property. Such as hiring a landscaper to mow the lawn or shovel the walk.
By understanding all of the various moving expenses that can be claimed. Can help people claim the maximum amount on their personal taxes. But it may be necessary to hire and Edmonton bookkeeping company to help them achieve that.