Did you move during the last fiscal year? Moving expense deductions in Canada, including Quebec, allow you to reduce your taxable income under certain circumstances. Here is a comprehensive guide to better understand the eligible moving expense deductions for taxes.
What Are the Eligibility Criteria?
You can deduct moving expenses from your taxes if you meet the following criteria:
- Change of residence: You must have moved to a location closer to your place of work or educational institution.
- Eligible income: You must be an employee or self-employed and have income that is eligible for deductions. For students, moving expenses can be deducted from taxes if you are enrolled in a full-time post-secondary program.
Minimum Distance
The new residence must bring you at least 40 kilometers closer to your place of work or educational institution compared to your previous residence.
What Are the Deductible Moving Expenses?
General Moving Expenses
- Transportation costs: Costs to transport your belongings, including moving truck rentals, gas, tolls, and vehicle rentals.
- Storage costs: If you need to store your belongings for a period before or after the move.
Associated Costs
- Labor costs: Fees for hiring professional movers.
- Installation costs: Costs for setting up your belongings in the new residence (e.g., utility connections).
- Travel expenses: Transportation costs for you and your family (e.g., airfare, gas for the trip, etc.).
Other Expenses
- Cleaning expenses: Costs for cleaning your former residence before leaving.
- Expense deductions: Costs for repairs or modifications necessary to adapt your new residence to your needs.
Exclusions from Eligible Moving Expenses
Certain expenses are not eligible, including:
- Fees for selling or buying a residence.
- Costs related to finding a new residence.
- Personal expenses: Such as food and accommodation costs during the move.
How to Calculate Moving Expense Deductions in Your Taxes?
- Federal Return: Eligible moving expenses must be declared in the federal tax return using Form T1, indicating the amounts in Schedule T1-M “Moving Expenses.”
- Provincial Return: In Quebec, you must also declare these expenses in your provincial tax return using Form TP-1.D “Moving Expenses.”
Required Documentation
Keep all receipts, invoices, and proof of payment for the moving expenses you wish to deduct. The Canada Revenue Agency (CRA) and Revenu Québec may request supporting documents in case of an audit.
Get Personalized Advice to Optimize Your Tax Returns
As you can see, moving expense deductions can help reduce your taxable income if you meet the eligibility criteria. Make sure to understand the eligible expenses, keep thorough documentation, and consult a professional to optimize your tax return.
To maximize your deductions and ensure their eligibility, you can consult one of our accountants or tax advisors. They will be able to answer your specific questions and guide you if you are in a complex situation.
