Many people may not even know that they are able to claim moving expenses on their personal taxes says Edmonton bookkeeping. Which is why it is always most beneficial to hire a professional to help them with their personal taxes.
It is very important to help people minimize the taxes that they pay back to the government. Because so many people pay so much of their income in taxes already. I helping people claim the most that they can. Can benefit people by keeping as much of their money in their pockets.
This is why many people want to claim their moving expenses whenever possible. However, many people assume that as long as they are moving for business reasons. They can claim their moving expenses. However, this is an incorrect assumption for people to make.
It does not matter if they are moving for business purposes or not says Edmonton bookkeeping. There are certain criteria that they must pass in order to ensure that they can claim their moving expenses.
This includes needing to move from 1 Residence in Canada to another, no matter where Canada’s those are. They also need to ensure that they are not getting reimbursed from somewhere else for their moving expenses. And that they must ensure that they are moving at least 40 km closer to their place of work.
Many people assume that this just means that the total distance moved must be 40 km or more. And this is not true. They must actually get 40 km closer to their work. And that they need to have sold their previous residence if they owned it.
However, the Canada revenue agency will make an exception for people who have tried to sell their place and have not been able to. Provided they are able to show documents demonstrating that they did make a reasonable effort to sell their home.
Once people qualify for having their moving expenses claimed on their personal taxes. They then need to understand that not all of their moving expenses qualify. And that there is a maximum amount that they can claim.
This amount is related to how much money they have earned. However, students who are not yet earning an income can claim their moving expenses. If they are moving to get closer to their school. The maximum amount that they can claim will be dependent on if they get government grants for their schooling, and if they are receiving scholarships.
Not only are some expenses not allowed to be claimed. But there might be a surprising amount of expenses that people may not be aware of. Which is why it is always best to contact and Edmonton bookkeeping company. And let them figure out not only what expenses they can claim. But how much they will be able to claim as well.
By allowing an expert to help them out with this task. Can ensure that a person is going to claim as much as they are entitled. So that they can get the best results from claiming their moving expenses.
Do You Need Our Example Leading You?
It is very important for people to minimize the amount of taxes that they possibly can says Edmonton bookkeeping. Because Canadians are paying so much in taxes already.
In fact, the Fraser Institute reports that the average Canadian pays 43% of their entire income in a variety of taxes. Including things such as income tax, CPP and EI. But also taxes like GST, PST, fuel tax and carbon tax.
In comparison to this, only 37% of the amount left over goes towards people’s basic necessities. Such as rent or mortgage and food. In fact, the highest tax amount that people will have is 48%. Without adding all of the additional taxes such as fuel tax and GST.
This is why many people do what they can to minimize the taxes that they pay to the government. By claiming as many expenses as they possibly can on their personal tax return.
And while understanding what expenses they can claim, and how much they can claim. It is often best to use the simplified method. The simplified method allowed by the Canada revenue agency is seventeen dollars per person per day, fifty-one dollars in meals per day, and forty-eight point five cents per kilometer.
If people are using the simplified method so that they do not have to go through hundreds of receipts. They still need to be able to prove to Canada revenue agency that they did incur those expenses. So they need to keep at least a copy of their receipt for at least seven years.
If a person does not want to use the simplified method, then their best bet would be to hire and Edmonton bookkeeping company. To help them figure out what moving expenses are claimable. And what expenses are not.
However, before they even get to that point, people should be keeping all their receipts that they are incurring during the move. Whether they think they are claimable or not. Because they might be surprised by what they are allowed to claim as a moving expense.
For example, many people are aware that fuel, meals, and accommodations can be claimed when they are moving. But they may not realize that they can claim incidental costs such as utility disconnections and connections, as well as the cost of having to pay for a new driver’s license when they get to their new residence.
Some other surprising expenses might include the maintenance costs of keeping their old residence kept up. While they are in the process of trying to sell it. This can include property taxes, utility bills, and even the cost of keeping the lawn mowed in their absence. As long as they have proven that they have tried to sell it before they moved. But were unable, all of the expenses associated with their old residence may be claimed on their taxes as a moving expense.
Because of how complex this issue is. By hiring and Edmonton bookkeeping company, people can ensure that they are not missing out on important amounts that can help minimize their taxes.