Did you and your family move this year? Was it to start a new job, a new business, or study at university? If the move was more than 40km, you are eligible to deduct your expenses against the income you made at the new job.
Canada Revenue Agency, the CRA, allows an assortment of moving expenses to be deducted from your employment/self-
* Transportation and storage costs for household effects: packing, hauling, in-transit storage, insurance
* Travel Expenses including meal, accommodation, and vehicle expenses to move you and your family
* Temporary accommodation and meals for 15 days
* The cost of cancelling a lease for your old residence
* Legal fees to purchase a new home, if you sold your old home
* Legal fees, advertising costs, realtor commissions, and mortgage penalties if you sold your own home
* Incidental costs to change your address on legal documents, replace driver’s licences, and utility hook-ups and disconnections
* Costs to maintain your old residence while vacant, such as interest, property taxes, insurance and utilities, when a reasonable effort is being made to sell the home (maximum claim is $5,000.)
For travel and meal expenses, CRA allows you to submit using either the Detailed Method or the Simplified Method of calculating expenses:
* For meals, under the Detailed method, you would submit all your actual meal receipts and claim the total cost. Under the Simplified method, you can claim $17 per meal, per person, up to a maximum of $51 per day, per person. You do not need to submit receipts.
* For travel expenses, with the Simplified method, you record the mileage driven for your moving expense, and multiply it by the rate in effect for your province (In BC it is $0.52 per km for 2010). Under the Detailed method, you would need to keep all your receipts for your automobile expenses for the year, including gas, repairs, maintenance, insurance, etc. and add up your total costs. Record your total mileage driven for the year, and the total mileage driven solely for the moving expense claim, and apportion the costs accordingly.
All your moving expenses can be claimed against the employment or self-employment income you earn because of the move in the year that you move. If your expenses are greater than your income from the new location, you can carry forward any unused amounts and deduct them against eligible income earned at the new location in the following years. You cannot use your deductions against any other income source such as investment income or Employment Insurance benefits. You cannot claim expenses for costs that you were reimbursed for, such as when your employer pays your moving costs for you, unless it was included in your income, or you deduct the amount reimbursed from your total expenses.
For students studying full-time at a post-secondary institution, you can claim moving expenses, but only against scholarships, fellowships, bursaries, certain prizes, and research grants that are required to be included in income. You can also deduct moving expenses if you move to work, including summer employment, or run a business. You would only be able to deduct moving expenses against the income you earned at the new location.
Students can claim moving expenses at the beginning of each academic period, as long as you have met the 40-kilometre limitation and have earned income at the new location. You can claim expenses for the move back after a summer break or work semester, if you have income earned at the new location. Unused deductions can be carried forward to future years, but only against the same type of income you receive and report on your return for the following years.
There are some other rules to follow, especially for moves into Canada or out of Canada, so check out the CRA’s website for more information. Talk to your tax professional if you think you may be able to claim moving expenses this year, or if you didn’t claim expenses for a prior years’ move – you can always have your return amended. It may just put some more cash in your pocket come April!
Need help navigating the CRA website? Visit http://howtosaveyourfinances.com/
