Tax Tips for Moving Expenses

Welcome to the beginning of a new series called Tax Tips! I’ll be posting tax tips for specific situations that may apply to you so be sure to check back often!

moving-truckHave you recently moved or are you planning on moving this year but don’t know what receipts to keep? The Moving Expenses tax credit is actually a fantastic credit that a lot of people are not aware of! I, personally, have been able to save a few thousand dollars in tax by claiming moving expenses when I sold my home in AB and purchased a home in BC.

How do I know if I am eligible to claim moving expenses?

You must have moved at least 40 kilometres to work or to run a business at a new location, or if you moved to take courses as a full-time student. Your new home must be at least 40 kilometres closer to your new place of work or school. Now, this may sound like a long distance, but here are some examples of possible moves over 40km: Vancouver to Langley, Victoria to Vancouver, and Duncan to Nanaimo!

What kind of expenses can I claim?

  • Transportation and storage costs (such as packing, hauling, movers, in-transit storage, and insurance) for household effects, including items such as boats and trailers.
  • Travel expenses, including vehicle expenses, meals, and accommodation, to move you and members of your household to your new residence (either keep your receipts or use the simplified method based on days of travel).
  • Meals and temporary accommodation near the old and the new residence for you and members of your household for a maximum of 15 days after the move (e.g. you stayed in a motel or another short-term accommodation).
  • Cost of cancelling the lease for your old residence (e.g. you had to pay out rent for cancelling the lease before the lease term was up).
  • Fees paid to change your address on legal documents (e.g. replacing your driver’s licence)
  • Utility hook-up/disconnection fees
  • Interest, property taxes, insurance premiums, and the cost of heating and utilities expenses you paid to maintain your old residence when it was vacant after you moved, to a maximum of $5,000.
  • Fees related to selling your old residence, including advertising, notary or legal fees, real estate commission, and mortgage penalty when the mortgage is paid off before maturity. (Big $$$ here!! – no maximum)
  • Fees related to the purchase of your new residence, such as legal or notary fees as well as any taxes paid (other than GST/HST or property taxes) for the transfer or registration of title to the new residence. (Hello, Property Transfer Tax in BC!)
What income can I use to claim the moving expenses against? If you are an employee, your income from your T4 and/or T4A slips that relate to the new work location will be used. If you are self-employed, it is your net self-employment income at the new location. If you are a student, your net eligible income is equal to the amount of scholarships and bursaries you received. If you are a full-time student with a paid co-op or a summer job, this income can also be used. 8iAEdM5yT
What if I moved in a previous year and had no idea I could claim all these expenses?! Is it too late now?! Not to worry, Coastal Tax can file a T1 Adjustment for you! Especially if you have sold and purchased a home, this could be very valuable to you. Contact Alicia at info@coastaltax.ca for a quote today.

-Alicia Loewen, Coastal Tax

The CRA may request copies of receipts and a letter from your employer stating that you were not reimbursed for your moving expenses. Please be prepared to provide this.
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One thought on “Tax Tips for Moving Expenses

  1. Pingback: Tax Tips for Moving Expenses Published! | Coastal Tax and Accounting Services

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