An
often-missed deduction, that can add up quite quickly, is the moving
expense.
If you move to a new location, you may be able to
deduct moving expenses from income earned at the new location.
You
may deduct moving expenses from your income if:
You
move your residence in order to earn salary, wages or
self-employment income at the new location in Canada, even if you
will continue to be working for the same employer.
You
moved at least 40km closer than your former residence to your new
place of work.
Your
ordinarily resided in your old home before the move and in your new
home after the move.
You
cease working at your old place of business.
Most
moving expenses are eligible for a tax deduction. You must pay for
the expenses by December 31 of the year you’re claiming them as
deductions. Specifically, they are as follows:
Travelling
expenses, including automobile expenses for you and your family
Meals
and accommodations on the way to the new residence
Costs
of moving your stuff (moving van, storage, insurance, and so on)
Costs
for up to 15 days for you and your family for meals and temporary
stay
Costs
of cancelling your lease on the old residence
Costs
of selling your old residence (advertising, legal fees, real estate
commission, and mortgage prepayment penalty if applicable)
Costs
of maintaining your old residence when vacant (including mortgage
interest and property taxes) to a maximum of $5,000
Legal
fees and land transfer fees paid in acquiring the new residence,
provided you sold the prior residence as a result of the move
Fees
for utility disconnection and hook-ups
Incidental
costs related to the move (for example, costs of changing your
address, and costs of acquiring new auto and driver’s licences
The
eligible moving expenses may be deducted only from your employment or
self-employment income earned at the new location. If your current
year’s eligible moving expenses exceeded your current year’s
income at the new location, the excess can be carried forward for
deduction on the next year’s tax return.
You can deduct moving
expenses only to the extent that the expenses were incurred by you.
You cannot deduct expenses that were paid for by your employer, or
that you incurred and were later reimbursed for by your employer. On
the other hand, if your employer provided you with an allowance, this
amount must be included in your income. Make sure you then claim any
eligible moving expenses as a deduction.
To claim moving
expenses, complete form T1-M. On this form you report where you
moved from and to, why you moved, and the specific details and dollar
amounts of your moving costs.
