It is very important for people to minimize their taxes on their tax return says Edmonton bookkeeping. Because the average Canadian pays so much in taxes. In fact, according to the Fraser Institute, the average Canadian pays an average of 43% in income taxes per year. The remaining amount that slept over, they will pay 37% on the basic necessities such as food, clothing, and clothing.
However, it can be a more complex issue than many people assume. That typically means an expert to help figure out. So that people can end up with the maximum amount claimed on their tax return. The hiring and Edmonton bookkeeping company. Can help ensure that people are getting the most claimed that they possibly can.
The first thing that people need to take into consideration, is that they must qualify for claiming their moving expenses. If they do not meet these three criteria, then it does not matter how much they have in moving expenses. They will not be able to use them on their personal taxes.
The first requirement is that a person must be moving from somewhere in Canada to somewhere else in Canada. This can be within the same city, province, or completely across the country. But as long as they are not moving from outside of the country, they will meet this requirement.
Another eligibility requirements that people need to meet in order to claim their moving expenses on their taxes. Is that they are not already getting reimbursed for their moving expenses. Whether it is a corporation that they own, or their employer. A person must not already be getting reimbursed for their moving expenses. In order to be eligible to claim their moving expenses on their taxes.
And finally, the last eligibility requirement is that a person must be moving 40 km closer to their work and that they have sold their old residence. Many people interpret this as moving a total of 40 km or more. This is not the case. They must actually be moving 40 km closer to their job. In order to qualify.
However, the Canada revenue agency does have some concessions. If a person is able to prove with documentation that they tried to sell their home. And was unable to. Will allow them to claim their moving expenses. Even if they have not yet sold their previous residence.
As long as a person has met all of these eligibility requirements. They will be able to claim all of their moving expenses. However, understanding which of their moving expenses are claimable. Is also something that can be difficult to interpret. Which is why it is important to hire an Edmonton bookkeeping company. Because not only will they be able to figure out what expenses are valid. But figuring out exactly how much they can claim in a year.
And if a person has maxed out that amount. They can carry forward to the rest of their moving expenses into a future year. To ensure that a person gets the best tax benefit they possibly can from those expenses.
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Understanding what moving expenses can be claimed on a personal tax return is a complex issue says Edmonton bookkeeping. And while there are many different rules that people who are moving can keep in mind.
The best-case scenario would be for them to keep all of their receipts. And then hire an expert at the end of the year. To figure out which of their costs can be claimed.
The reason why it is best to hire an expert is that some people might be overlooking some expenses that are perfectly claimable. Especially if they have not maxed out there a maximum amount that they can claim on their personal taxes.
For example, many people are aware that they can claim their fuel, meals, and accommodations it during the move. They may not be aware that they can claim temporary living expenses. If they had to vacate their home they are moving out of early. Or if their new home was not ready for them to take possession and move in when they arrive.
And while people can claim their temporary living expenses on their personal taxes. There is a maximum of fifteen days that people can claim. Therefore, all of the things that a person pays for while they are in the process of moving their home. Should be kept because they might be claimable.
Another expense that some people might not be aware of. Is that if they had to hire a real estate broker to sell their old place. Because it was not able to sell before they moved. Edmonton bookkeeping says while people cannot claim the entire cost of their house. They can claim their real estate brokers commission. As well as things like legal fees and registration fees associated with the sale.
If a person was not unable to sell their previous residence prior to moving. Even some of the maintenance costs associated with hiring people to maintain the house in their absence can be claimed. For example, property taxes, utilities, or hiring cleaners or landscapers. Can be claimed. As long as people have shown documentation that they tried to sell the property but were unable to.
Even incidental costs can be claimed as moving expenses. Such as utility connections and disconnections as well as the cost of obtaining a new driver’s license, or a new vehicle permit associated with that move.
One of the most important things that Edmonton bookkeeping will recommend is that people keep all of their receipts as much as possible. Because Canada revenue agency may ask to see those receipts. Even if a person is using their simplified method of claiming the moving expenses. The Canada revenue agency may still request to see a copy of their receipts. Even if they are using the simplified method.
Understanding the moving expenses that a person can claim on their personal taxes is complex. And hiring and Edmonton bookkeeping company will ensure that people can get the maximum deductible that they can on their personal taxes. For all of the expenses they incurred.