Most people who have moved during the course of a year have no idea that they have access to tax deductible moving expenses that they can claim during tax season. The newest tax software can help make some people aware of this, but for those who take their taxes into a place that doesn’t remember to ask about it, or for those who do their taxes themselves without software, many remain blissfully unaware.
Who Can Claim Moving Expenses?
If you are employed and have moved to be closer to your new or existing job, then you can claim your moving expenses on your taxes. You must have moved 40 km or closer to your job to qualify for this. In this case, “closer” just means using the most likely route using public roadways.
If you are self-employed and have moved to run your business in a new location, or if you will be working from your new home, then you are eligible to claim your moving expenses.
If you are a full-time student who has moved to be closer to their school, then you will be eligible to claim your moving expenses. This deduction comes from any grants, scholarships, bursaries, etc. that you are forced to claim as income.
What Can You Deduct as a Moving Expense?
You may claim a number of different things that will cost you out of pocket when you move as long as you meet the eligibility requirements stated above.
Any transportation and storage costs that you accrue during your move including, rental trucks and insurance, the hiring of movers, and packing materials for household items. Plus you can also get deductions for the movement of trailers, boats, or other large items to your new home.
You can deduct meals, fuel and other vehicle expenses, and even accommodations that you use while you are traveling with your family from the old home to the new one. This includes accommodations for up to 15 days if your family has to wait in between moving from your old home, and into the new one.
You will be able to deduct the costs associated with the purchase of your new residence. This includes the notary or legal fees, and any taxes paid (excluding GST/HST and property taxes) to register or transfer the title of the new home to you. This can only be claimed if you sold your old home, though, so if you keep it as a rental property, these deductions are not available to you.
When you sell your home, you will be able to claim the costs associated with selling your old home, these include any legal fees, real estate commission, advertising fees and even any mortgage fee penalties that you might have been assessed due to paying back your mortgage early.
The deductions aren’t just for selling off your old home either, you may be able to deduct property taxes, certain utilities, interest on your mortgage, and insurance premiums up to a maximum of $5000 as long as your old home remains vacant after you move. If you rent it while it is selling, you will not be eligible for these deductions.
Lastly, you can claim any incidental costs that you have to pay for during your move including, utility hook up and disconnect costs, legal change of address documents, and replacement of your driver's license and non-commercial vehicle permits as needed if you moved out of the province, or country.
If you were reimbursed by the company that you work for to make the move, then you can only deduct any expenses above and beyond what that reimbursement covered. If you were not reimbursed in any way, however, you may need to acquire a note from your boss stating that you were not paid in any way to move to the new location, as you may need to present it to the government if they ask. It is recommended that you keep all of your receipts from your move as well, just to be safe.