Can I Write Off Moving Expenses?Brian Jang ON August 2, 2016
The warm summer season is the perfect moving time for many Canadians. And if you are one of them, you are undoubtedly planning or in the midst of a summertime move. Whether it’s for a new job, to be closer to school, or you are looking to upsize or downsize, there is a host of reasons why people choose to relocate.
Whatever the reason, moving is no easy task. It requires a lot of preparation, like getting your home ready to sell, finding a new place to live, packing up all your belongings, and dealing with the constant barrage of realtors and strangers dropping by at a moment’s notice. And last but certainly not least, moving can be exceedingly expensive.
Ask anyone who has ever moved, the costs can quickly add up. So, it only makes sense to try and save a few dollars whenever and wherever you can. Right about now, you are probably wondering if the Canada Revenue Agency allows you to deduct moving expenses on your tax return. Well, it will all boil down to a number of factors.
According to the CRA, you can write off your moving expenses for new employment or self-employment reasons. However, the distance between your old home and your new work location must be 40 kilometers or further than the distance between your new home and your new work location. What’s more, you must have ended your employment from your old work location. So, if you are working remotely, you won’t be eligible.
If you meet the distance requirements, there are several allowable moving expenses. For example, you can deduct costs associated with buying your new home and selling your old home, or cancelling your old lease. You can also deduct expenses related to the transportation and storage of your household items, utility hook-ups, and disconnections, as well as travel costs and temporary living expenses from your old place to your new home.
You cannot deduct costs that help sell your home, such as renovations or repairs, nor can you deduct the amounts spent for the house or job-hunting trips prior to your move. Plus, you cannot deduct the costs of your belongings that may have been damaged during your move.
When it comes to moving expenses that are deductible, the CRA is reasonably generous. Just make sure to keep track of all your expenses and hang on to your receipts.
Moving can be a hectic process. And trying to figure out what can and can’t be deducted is only going to add to the chaos. So, it’s a smart idea to contact your accountant before you move.
For a free consultation, contact BCJ Group, Chartered Professional Accountants today!