Many people who have moved in the past year may think that they can automatically clean these expenses on their personal taxes says Edmonton bookkeeping. However, this is not necessarily true. Even if people are moving expressly for the purpose of their work. May not be able to claim their moving expenses.
There are actually many different requirements they have to meet that are set out by the Canada revenue agency. That will help a person understand if they meet the criteria. And are able to claim their expenses.
The first thing that they need to ensure is that they are moving a minimum of 40 km closer to their work. Whether this is a new job, a promotion. Or they are not changing jobs. They just want to move in order to be closer.
This does not mean that the entire distance of the move has to be at least 40 km. But they have to move 40 km closer to their work in order to be able to claim their moving expenses on their personal taxes.
The next requirement is that it has to be a domestic move. From somewhere within Canada. To anywhere else within Canada. People moving from outside of Canada to the country. Even if it is for work purposes will not meet the requirements.
People also need to ensure that they are not getting reimbursed for their move from anywhere else. Such as their own corporation if they are a business owner. Or from their employer.
Once a person has met all of these eligibility requirements. They also need to ensure that they have either sold the home that they lived in if they owned it. Or they can provide documents showing that they tried to sell the home. But were unsuccessful.
Once all of these eligibility requirements have been met. Then a person can claim their moving expenses. But what expenses are eligible to be claimed, and how much can they claim can be a tricky question to answer.
There is a maximum amount that they are allowed to claim. But that amount is based on how much money they made in that year. If they were not able to work the full year. Maybe they were unemployed, or maybe they took time off in order to make that move. And so they are not reporting a full year of income.
Luckily, Canada’s revenue agency allows people to carry forward expenses to the following year. Therefore, they can hire and Edmonton bookkeeping company will be able to help them figure out if they should claim all of their moving expenses in the current year. If it is more advantageous for them to claim all of their moving expenses in the incoming year. Especially if they stand to make more income in the coming year.
Once they have hired their Edmonton bookkeeping company. They will be able to go through all of both persons’ moving expenses. In order to figure out which expenses they can use to maximize how much money they can claim in personal taxes.
What Can We Teach You More About?
Many people do what they can to claim as many expenses as they can on their personal taxes says Edmonton bookkeeping. The reason why is because the average Canadian pays up to 43% of their entire income in a variety of taxes. And minimizing that number can help ensure that they keep as much of their money as possible.
However, what counts as a moving expense might be surprising. Therefore, rather than a person trying to find out what receipts they should keep. Edmonton bookkeeping recommends that they keep all of their expenses.
And then hire them at the end of the year to sort through those expenses to help them figure out how many of them are valid moving expenses. To maximize the amount they can claim on their income tax.
The reason why they need to keep all their receipts. Is because there might be some moving expenses that they might not think are moving expenses. But can definitely be claimed on their taxes.
A great example of this period is if a person is not selling their previous residence immediately. And had costs associated with maintaining it. Such as property taxes and utility bills. But also things like maintaining the exterior of their home. Such as mowing the lawn in the summertime. Or shoveling the snow in the winter. So that they could still attract buyers for the house. Can all count as valid moving expenses.
Even if a person had to hire a real estate broker in order to sell their old place, will allow a person to claim their commission. As well as any legal fees and registration fees associated with selling the house.
Even costs called incidental costs can be claimed. Such as utility disconnection and reconnection fees. And the costs associated with getting new identification and documents with their new address. Such as drivers licenses, and provincial identification cards.
People might not even realize that if they hired people to pack, move as well as all their belongings. Can submit all of those expenses to their income tax. Even the insurance that they would put onto their belongings, and storage, if they were not able to immediately move into their new home.
When it comes to actual travel, people might often know that they can claim their gas costs, meals, and accommodations. But they might not know that they can claim new tires, increased insurance for the journey, oil changes, and mechanics bills.
Because so many of these expenses might be unusual or not thought of by a lot of people. It is a better proposition for people to simply keep every single expense they incur. And then allow their Edmonton bookkeeping company to figure out what are valid moving expenses, and how much they can claim on their personal tax return.
By allowing the experts to do this. People can ensure that they are ending the best benefit, without worrying that they are missing something by doing it themselves.