Are moving expenses a tax deduction, could you explain?

Moving expenses can be incurred by someone for relocation to commence business or employment in another part of Canada. This type of expense can be deduct to the extent of income earned in the new location – means the deduction is limited to the amount of employment income or business income earned at the new location. The unused portion can be carried forward and used in the following year.

Moving expenses become eligible for deduction only if the new residence location is at least 40km closer to the new work location than the previous residence.

Deductible moving expenses include:

• travel costs (including meals, lodging and automobile expenses) incurred while moving, storage belongings
• temporary board, lodging near the new or old residence (up to 15days)
• cost of cancelling a lease for the old residence
• selling costs of the old residence, and legal fees and land transfer taxes for the purchase of a new residence if the old residence is sold
• up to a maximum of $5,000 for maintenance for a vacant former residence, such costs include mortgage interest, property taxes, insurance, heat and power

ABOUT THE AUTHOR

ALLAN MADAN

CA.CPA.CGA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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