If you have moved within Canada or even from outside Canada this year, you might not know that you may be able to deduct certain moving expenses on your tax return. It does depend on few simple conditions so not every Canadian will be eligible to claim these expenses.
How do you know if you qualify?
You must have moved during the year from the place you ordinarily reside and established a new home where you will reside to start a new job or business. This new home must be at least 40 kilometres closer to your new place of work or business than your previous home.
In addition, you must be a resident of Canada and have earned income at your new location.
Full-time students may also qualify to deduct eligible moving expenses from the part of your scholarships, fellowships, bursaries, certain prizes, and research grants that are required to be included in your income. Similar to the qualifications above, you must have moved at least 40 kilometres closer to your new school and you have sold or rented out your old home.
As a student, If you also plan on working you can claim moving expenses from the employment income you earned at that new location.
What are some examples of eligible moving expenses?
The most common expenses are transportation and storage costs such as packing materials, renting plastic moving totes, hauling, movers, in-transit storage, and insurance. You may also include travel expenses for you and your family members. These are things like gas, meals, and accommodation.
You can also deduct your temporary living expenses (up to 15 days) for meals and accommodation for you and your family. Cost of canceling a lease or to maintain your old home are also eligible up to a maximum amount.
If you had to sell your old home or if you purchased a new home, you can deduct selling and purchasing costs such as real estate fees, notary or legal fees, and mortgage penalties.
Other incidental costs like changing your address on legal documents; replacing driving licenses, and utility hookups and cancellations are also deductible as long as they are related to the move.
How To Claim These Expenses?
Fill out form T1-M, Moving Expenses Deduction to calculate the moving expenses that you are eligible to claim and enter that amount on line 219 on your income tax return.
You need to ensure that you keep the filled document and all receipts in case the CRA requests you provide support for your claim.
For more details about eligibility, eligible expenses, and methods of calculation, see the Line 219 section of the CRA website.
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