Moving expenses are eligible to be deducted if two conditions are met:
- You moved for a job or to run a business at a new location or you moved to attend a full-time post-secondary program
- Your new home is at least 40 KMs closer to your new work/school
You can deduct these expenses are to offset income earned from the move (ie: from your new job/business or from full-time school scholarships etc.).
Ex: if you move January 1st 2021 from Toronto to Calgary to start a new job, and earn income at this new job all throughout 2021 – you could claim your moving expenses in 2021 and get the deduction in 2021
Ex: If you moved at the end of 2021 and did not earn income at new job until 2022, you can claim the moving expenses in 2021 however they will be carried forward to 2022 to be deducted when the income is earned
The following are eligible moving expenses you can deduct if you meet the above conditions:
- Transportation and storage costs ex: packing, moving, storage etc.
- Travel expenses ex: vehicle expenses, meals, accommodation etc. (simple or detailed methods, see below)
- Temporary living expenses for a maximum of 15 days ex: meals, temporary lodging
- Costs of cancelling a lease
- Incidental costs ex: changing addresses on legal documents
- Costs of maintaining your old home when vacant, up to a maximum of $5,000.00 (given you made reasonable efforts to sell)
- Costs of selling your old home ex: advertising, legal fees, real estate commissions, mortgage penalty
- Costs of buying the new home, if the old home was sold because of the move ex: legal fees, taxes paid, transfer/registration of title
You can claim vehicle/meals moving expenses using either of the following two methods:
- This is based on a rate per KM travelled to create a deduction
- There is also a flat meal rate per person
- You will need to keep track of the KMs travelled for the move that year as CRA may request this
- This is based on the actual costs of the expenses associated with the vehicle/meals for the move
- You will need to keep the receipts as CRA may request them
If you meet the qualifications to claim moving expenses but want an expert to do it for you, contact us at Jibe Accounting!