Are Moving Services Tax Deductible in Canada?

February 2, 2020

 

Keyword: moving services

 

Moving services can be a tax deductible expense in some cases, but the benefit doesn’t apply to everyone. But if it does apply to you, you’ll want to know about it!

 

Every tax deduction means a little more money in your own pocket. If you’ve recently moved or are planning to move in the near future, it pays to see if you might be eligible for a tax deduction. And if so, you’ll

 

need to know exactly what does and does not count as a deduction.

See if you can take advantage of the moving expense tax deduction to lighten your out-of-pocket costs. 

 

 

Can I Claim Moving Services on My Taxes?

 

Anyone who relocates for a job, whether it’s to start a business in a new location or you got a new position working for someone else, is eligible to deduct moving expenses. To take advantage of the deduction, you must be a Canada resident and your new location must be at least 40 km closer to your place of work than your previous location. Self-employment opportunities count as well. 

 

This includes individuals who move within Canada, move from Canada to a work location outside the country, or move from outside the country into Canada for work. In addition, full-time students may take advantage of the deduction as part of any scholarships, grants, or bursaries that are taxed as income.

 

 

Types of Deductible Moving Expenses

 

The term ‘moving expenses’ is broad, encompassing a variety of costs associated with moving. 

 

Typically, you can include the following items in your tax deduction

calculation:

 

Moving services

 

- Temporary storage of items

 

- Travel expenses to the new location

 

- Accommodations and meals for your family during the move

 

- Temporary living expenses up to 15 days ( including meals)

 

- Any fees incurred in cancelling your old lease

 

- Up to $5000 in costs to maintain your old residence after you vacate    it

 

- Costs of buying or selling a property (e.g. real estate fees, legal fees,    mortgage penalties, etc.)

 

- Incidental fees (e.g. changing driver’s license, utility hookups or       disconnections, etc.)

 

Just as important, there are certain things you cannot deduct from your taxes. Improvements to your home to make it sell faster, a loss from the sale of your home, travel expenses resulting from job hunting or house shopping, and mail-forwarding costs are not eligible for the moving tax deduction benefit. You can see a complete list of non-deductible expenses here.  

 

However, if you receive reimbursement from an employer for your moving services, you may not include that amount in your deduction. You may only claim the amount you pay out of pocket OR you must include the reimbursement amount as part of your income.

 

 

How Do I Claim Moving Expenses on My Taxes?

 

If you qualify for tax benefits on your moving expenses, you’ll need to use Form T1-M to calculate your deductions. You do not need to attach the form to your tax filing, nor must you submit any receipts or documentation to support your claim. However, it’s always a good idea to hang onto your receipts just in case the Canada Revenue Agency requests proof.

 

Are you ready to get moving? Contact us today for a quote on moving services!

 

 

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