Did you know you can deduct all your moving expenses? You can and it's perfectly legal. According to Canada Revenue Agency (CRA) you can deduct all your expenses relating to moving subject to certain restrictions and dollar amounts.
In this instance I recently moved from Anywhere, Ontario, Canada to Newmarket, Ontario, Canada to get closer to my clients. CRA says the move must be a minimum of 40km from the current place of residence to the new place of residence. This is calculated using the shortest distance possible using public roads. In this case the move was 42km, putting me 2kms above the minimum set out by CRA. I also rented a moving van for 2 days at a total cost of $100 including mileage. Along the way 2 of my employees who helped me and myself incurred meal expenses totaling $51 for the one day and another $30 for breakfast and lunch the next day for helping me. I had to terminate my lease early at a cost of $800 for rent as this was in the middle of the month when I moved. I also incurred gas expenses of $50 while looking for a new place. I had to put my dog in a kennel for 2 days while I moved total cost $50.
The question then is can I deduct any or all of these expenses? The answer is yes, but only some of the expenses can be deducted. The meal expenses can be deducted as the $81 for total meals qualifies for the deduction. The rules state the maximum allowable meals deductions are $51 per day. Two days, $81 in meal expenses, check. The moving van $100 for two days including mileage, check. The lease cancellation of $800 for rent, check. $50 in gas while looking for a new place, check. Kennel for housing my dog for 2 days $50, not deductible. It seems that pets are not a valid deduction for moving expenses. That's too bad too because I couldn't imagine doing this move without worrying where my dog was at every stage of the move. The total amount of the tax deduction works out to be: $1,031 not including the dog kennel rental.
I had a client come into my office the other day wanting to know if she could deduct her moving expenses. It turns out that she moved from one part of town to the other and the total mileage was less than the 40kms stipulated in the rules set out by the taxing authority. She was furious, but there was nothing I could really do for her and she even threatened to all her friends about how unfair I was being. That happens in my business you can't satisfy everybody, but hey I didn't make the rules either. I get my orders from the taxing authorities like everyone else. If they say no way, then I have to tell the client no way. Who says life being a personal finance expert is easy?
About Author / Additional Info:
mathew jazenko is CEO of MRJ Financial Solutions and is dedicated to improving your bottom line. Questions/comments can be sent to: mrjfinancial@gmail.com or visit http://www.mrjfinancialsolutions.ca