Are you Relocating?
Whether you are relocating overseas, across the country, seeking a new job, a better house, or are making this change for another reason, a move can be very exciting. You eagerly anticipate the prospect of meeting new people, making new friends, and starting a new chapter in your life. However, once you start thinking about moving your belongings (and the costs involved in doing so), this fun idea sounds a lot more like work.
Packing, storing, transporting, and then unpacking furniture and other household goods means large expenses you will need to cover. You will also need to consider another expense in addition to moving costs — taxes. For people who are not aware of the tax ramifications associated with moving, these costs can add up quickly.
If you live in Canada and plan to move or store your belongings, you’re probably not aware that you may be able to claim storage units as a tax-deductible item.
Are you wondering if this (and other deductions) apply to you? Read on to find out about some common tax deductions related to moving and storage.
What is a Tax Deductible Expense?
Tax deductible expenses are certain costs that are exempt from taxation. They can be paid from the part of your income that is not taxed by the government; this means that the amount of tax that you pay is reduced.
Moving to Another Location in Canada
If you are moving within Canada, moving expenses are eligible for tax deductions as long as at least one of the following conditions is met:
• You are currently employed
• You are a full-time student at a post-secondary program at a university, college or other educational institution
• Your new residence is within 40 km of your workplace (by the shortest usual public route)
• You are relocating because you want to start a business
Storage rentals can be classified as claimable expenses provided that you are storing household items while you move or sell your home.
Storage and Moving Supplies
Some businesses may require a storage facility to house items such as business documents, tools and equipment, and any other extra inventory. If you are storing similar items in commercial storage, then you can claim tax deductions when the time comes. You can also claim tax deductions for items you buy for your move (e.g. boxes and packing supplies).
While moving can definitely be a costly expense, there are tax deductions designed to ease the financial burden. For more information about which moving and storage expenses qualify for tax deductions in Canada, please review and follow these guidelines. You may also wish to reach out to an accountant to explain these, and other, tax considerations related to your personal and professional life. We wish you all the best for a smooth transition as you prepare for an exciting change!