Can Moving Expenses Be Claimed On Income Tax

With tax season nearing, you might be questioning whether it’s possible to include moving expenses on your tax return. The response is affirmative, but only in specific situations. While not all individuals will qualify for this deduction, those who do may be able to write off a portion of their moving costs on their taxes.

To be eligible to claim moving expenses on your income tax return, there are a few important criteria to consider. The move must be connected to starting a new job, business, or attending full-time school at a post-secondary institution. Additionally, the new location must be at least 40 kilometers closer to your new place of work or school than your previous location. Lastly, the move must be within Canada, with some exceptions for moves between Canada and the United States.

If you satisfy these criteria, you could potentially claim several moving expenses when filing your income tax return. These expenses encompass hiring professional movers, packing and transporting household items, storage fees, travel costs, and temporary accommodation costs. Furthermore, you may also be eligible to claim expenses related to selling your previous home or terminating your lease, as well as purchasing or renting a new residence.

Please note that not all moving expenses qualify for a tax deduction. Expenses such as meals during the move, new furniture or household item purchases, and costs related to selling or buying a home are not eligible for a tax deduction. Also, expenses reimbursed by an employer or government agency do not qualify for a tax deduction.

To claim moving expenses on your income tax return, it is necessary to maintain thorough records of all expenses incurred during the move. This includes receipts, invoices, and any other relevant documentation. Additionally, you must fill out Form T1-M, the Moving Expenses Deduction form, and submit it along with your income tax return.

As a self-employed individual or business owner, you might be eligible to deduct moving expenses as a business expense. To do so, you will have to fill out Form T2125, also known as the Statement of Business or Professional Activities form, and list your moving expenses on it. It is essential to maintain thorough records of your expenses and submit any relevant documentation to validate your claim.

In general, claiming moving expenses on your income tax return can lead to substantial savings for those who qualify. By maintaining thorough records of all moving costs and filling out the required paperwork, you could potentially lower your taxable income and secure a higher tax refund. If you are unsure about your eligibility to claim moving expenses on your tax return, it is advised to seek advice from a tax professional or accountant.