While many people believe that any moving expenses they incur can be claimed on their taxes says Edmonton bookkeeping. This is not necessarily the case. In fact, a person needs to meet several requirements set out by the Canada revenue agency. In order to claim any of their moving expenses.
The first criteria that they must clear in order to ensure they can claim their moving expenses is that they must be moving at least 40 km closer to their place of work. This could be work that they are already employed at. A promotion, or even a new job that they are taking.
Another requirement is that they have to ensure that the old home if they owned it. Is sold before they claim their moving expenses. There is one caveat to that. Canada revenue agency says that as long as a person can show documentation that they did try to sell their property. If it has not sold yet. They will be able to claim their moving expenses.
The third requirement is that it must be a domestic move. From anywhere in Canada, to anywhere in Canada. Outside of Canada moving to the country is not eligible.
And finally, they can only claim their moving expenses if they were not previously reimbursed for the same expenses.
However, before someone starts assuming that since they met all the eligible criteria. That they are going to be able to claim all of their expenses. Because there is a maximum amount that they can claim. This is limited to the amount of income that they have earned in that year.
However, the Canada revenue agency also allows people to carry forward any moving expenses into the next year. Therefore, it could be a strategy that they implement along with their Edmonton bookkeeping company.
To decide if they should claim their moving expenses in the current year. If they should push off all of the moving expenses to clean in the next year. Especially if the next year should be resulting in more income. That means they will be able to claim more expenses.
Or, would it be most advantageous for them to claim some of the moving expenses in the current year. And then moving the rest of the expenses to the next year.
Because it could be a little bit tricky to figure out. If a person has moved and has met all of the requirements. They may decide it is in their best interest to hire an Edmonton bookkeeping company is going to be able to help them figure that out.
Even students who have moved in order to be closer to their school that they have been accepted into. Can claim their moving expenses. However, there is a maximum as well on students. If they have received government grants.
If people are moving, it is well worth the effort to ensure that they meet the eligibility requirements of the time. So that they can keep all of their expenses so that they can claim it.
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Many people want to be able to claim as many expenses as they can on their personal taxes according to Edmonton bookkeeping. So that they can minimize the amount of tax that they end up owing to the federal government.
A study done by the Fraser Institute shows that the average Canadian pays 43% of their entire income in a variety of taxes. This is more than just income taxes and CPP and EI. But also includes taxes like GST and fuel tax just to name a few.
In fact, so much of the average Canadian income goes towards taxes, that only 37% of the remaining amount goes towards their basic necessities like food, clothing, and shelter.
This is why so many Canadians want to know all of the various expenses that they can claim on their personal taxes. So that they can minimize the taxes that they do have to pay.
And while moving expenses can account for a lot of the expenses that they can put on their personal taxes. They should talk to Edmonton bookkeeping company. The find out what expenses they should save receipts for. Because there may be a wider variety of expenses that they can claim then they previously realized.
The first thing that they need to keep in mind, is that they can claim moving expenses for their entire family, as long as that family is moving with them. This means for all of the meals that they claim as well as accommodations should be kept for every single member of the family that is making the move.
Many people understand that the travel expenses that they typically can claim include fuel, meals, and accommodations. And this is what is allowed in the Canada revenue agency simplified method. The simplified method allows people to claim seventeen dollars per person, plus fifty-one dollars a day for meals. Plus be able to claim forty-eight point five cents per kilometer for the entire distance that they traveled.
While the simplified method can help a person get the amount that they can claim easily. It might not have them maximize their entire moving expenses. Which is why someone might want to go through the trouble of looking at all of the receipts that they have. In order to claim the entire movie and not just their simplified method.
Therefore, additional travel expenses that they will be able to claim other than food, fuel, and accommodations. Can be things like increased insurance that they might need for the trip, paying for engine or tire troubles. And even temporary living expenses related to needing to stay in a hotel before their move or after their move.
They can even claim tracking expenses for their belongings, including tacking, moving, as well as insurance and cancellation lease.
By understanding the vast various expenses that they can claim. Can encourage anyone who is eligible to claim their moving expenses. Can work with an Edmonton bookkeeping company to figure out exactly what expenses they are eligible to claim so that they can maximize the tax savings on their personal taxes.