Are Moving Expenses Tax Deductible

A question that often gets asked Nanaimo Movers is when moving for work or school is whether they are tax deductible. Students and others can deduct certain expenses related to their move from one location to another in Canada as follows:

What are the conditions for students to claim moving expenses.

Full time students can claim moving expense if they take post secondary course at a university, college or other educational institution if the new residence is at least 40 km closer to their new school. Any expenses are deductible at the beginning of the school year and when they move back after summer break or work semester.

Co-op students can use student tax deductions also to deduct moving expenses. They must first have taxable income from awards ( scholarships, fellowships, bursaries, certain prizes or research grants against which to deduct your moving expenses.) If a move is required to a new location for work ( including summer jobs ) or to run a business, you can use moving expenses to reduce the income tax payable on those earnings.

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What conditions do employees or those self employed meet to deduct moving expenses.

If they are moving at least 40 km closer to a new work place or have been relocated by their employer they can deduct certain expenses related to the move against income earned at the new location. The new residence must be the place where you and members of your household normally reside. Employees who have to provide a home office as a condition of employment may claim eligible expenses. Allowable expenses are as follows:

1)    Transportation and storage of household effects

2)    Travel to and from the new residence

3)    Accommodation, meals and temporary living expenses near old or new residence

4)    Expenses related to the purchase of the new residence

5)    Address changes on legal documents eg driver’s licence

6)    Utility hook ups and disconnection etc

Not eligible:

Any expenses for which you have been reimbursed by your employer, additionally you cannot deduct cost related to house or job hunting trips before you moved or the cost of cleaning or repair services ( eg mail forwarding )

When moving expenses are more than eligible income earned at the new location or taxable amount of awards they can be carried over against eligible income earned at the new location.

Another question often asked is if moving expenses can be split with a spouse. The answer is you can split legitimate moving expenses for a family move with your spouse if that will maximize your deduction or by having the spouse with higher marginal tax rate claim the entire amount.

If there’s a move in your future,when searching for moving companies on Vancouver Island contact Sunrise Moving and Storage.