Generally speaking, if you are moving for a new job, to go to school full-time or to start a new business, you are eligible to deduct reasonable amounts that you have had to pay for moving yourself, your family and your possessions to the new location. Here are five common moving expenses you can write off come tax time in April.
1. Transporting your stuffâ€¨
This can include anything from hiring movers and purchasing packing supplies to hauling and in-transit storage for your household items. You can also deduct the cost of moving larger possessions, such as boats and trailers.â€¨
2. Meal expenses
The cost of eating during a move can be deducted as well. There are two ways you can do this -- using either a detailed or a simplified method. With the detailed method, you must keep all of your receipts and claim the actual amount that you spent. Using the simplified method, you can claim a flat rate of $17 per meal up to a maximum of $51 per day. You can claim meal expenses for up to 15 days of transit.â€¨
3. Vehicle expensesâ€¨
As with meal expense deductions, you can deduct your vehicle expenses using either the detailed or simplified method. With the detailed method, keep:
• All receipts from operating and ownership during the tax year, including fuel, oil, tires, insurance, maintenance licensing fees and repairs;
• Depreciation, provincial tax and finance charges;
• A record of the total number of kilometres travelled during the year of the move, as well as those driven specifically for the move.
For example, if you drove 20,000 kilometres during the year, and 5,000 of those kilometres were related to the move, then 25 per cent of the total vehicle expenses for that year can be claimed as moving expenses.â€¨â€¨
With the simplified method, you simply deduct anywhere from 40.6 to 60.5 cents per kilometre driven, depending on which province or territory the move began in.
4. Cost to maintain your old residence
You are able to claim up to a maximum of $5,000 to maintain your old residence if it sat vacant while you moved, provided you can show you put in reasonable effort to sell the home. This can include deductions for interest, property tax, insurance premiums and heat and utility expenses.â€¨
5. Cost to sell your old residenceâ€¨
When your old residence is sold as a result of your move, you may claim legal fees for the purchase of a new residence, as well as any cost related to selling your old residence, such as advertising, legal fees and real estate commissions. However, you cannot deduct expenses for work done to improve your home for sale, any loss from the sale of your home or expenses for house-hunting trips before you move.
It's important to note that if your employer will be paying for some of your relocation expenses, you will not be able to claim that portion on your income tax return. But even still, the ability to deduct the cost of moving can have a big effect on the tax return for many people looking to relocate for a job, or for their education.
Krystal Yee is a marketing professional living in Vancouver. She writes about personal finance at Give Me Back My Five Bucks (givemebackmyfivebucks.com), and the Toronto Star’s Moneyville.ca. You can reach her on Twitter (@krystalatwork)