Tax deductions for moving costs that could save you a lot

December 9, 2014

Certain employees and students can claim big money-saving tax deductions for moving costs. Could you also be eligible? Read on to ensure you don't miss out.
It’s not necessary to move all the way from one coast to the other to qualify for tax deductions for moving costs. If you’re an employee, self-employed or a full-time student, you may be able to deduct some of the expenses you incurred when you changed addresses. Could this be the case for you?

Tax deductions for moving costs that could save you a lot

Eligible taxpayers

To take advantage of any tax deductions for moving expenses, you must meet one of the following criteria:

  • You’re an employee or self-employed person who moved at least 40 km closer to a new place of work.
  • You’re a full-time student and you moved at least 40 km closer to a university or college in Canada.
  • You’re a full-time student and moved at least 40 km closer to a co-op job, summer employment or to a business you ran.

In other words, the distance between your old residence and your new employment or post-secondary institution must be at least 40 km greater than the distance between your new residence and the new workplace. Thus, if the original commute was 54 km and the new commute is only 12 km, you’re considered eligible (54-12=42).

If, however, you’re packing up shop and moving out to the countryside to take it easy during your retirement, you’re not one of the lucky taxpayers who can claim tax deductions for moving expenses on their next return.

Six tax-deductible moving costs

Here are some of the deductible moving costs for eligible taxpayers that you might possibly be allowed to claim.

  1. Expenses related to moving your furniture, including packing, storage, and movers.
  2. Costs incurred in moving from one home to another, such as gasoline and other car expenses, meals and hotel rooms.
  3. Temporary living expenses incurred during a move, in proximity to the old or new residence, such as meals and accommodations.
  4. Costs related to the termination of a lease or sale of the old residence, like notary fees, certificate of location and mortgage discharge.
  5. Expenses incurred by the connection and disconnection of utilities, some being electricity, cable and telephone.
  6. Expenses incurred if your former home doesn’t sell, everything from heating costs and property taxes, to insurance premiums and interest.

Since deductible moving costs can save you a lot of money, it may be a good idea to consult a tax expert or accountant in order to be sure you maximize the opportunity. It can be all too easy to get lost in the maze of tax complexities.

The most important advice

You must be able to prove to the Canada Revenue Agency (CRA) that you actually paid for these moving costs. Keep all your receipts and invoices, as the CRA may require you to provide them as proof of your claims.

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