Relocating for work or school? If you are moving to start a new job, run a business or study full-time at a post-secondary level, you may be eligible to deduct some of your moving expenses from your income taxes.
Eligibility rules are the same for both the Canada Revenue Agency and Revenu Québec. If you want to deduct moving expenses, your new home must put you at least 40 km closer to your workplace or school.
Expenses you can deduct:
moving company fees
rental fees for a truck or trailer
storage costs for your household belongings
food and lodging expenses for you and your family during the trip to your new home
the cost of selling your old home or cancelling your lease
the cost of upkeep for your old home if it remains vacant for a time despite reasonable efforts to sell (maximum $5,000)
It seems so easy at first glance! We are preparing to complete our tax return when the accountant suddenly brings us back to earth. “Careful, you’re not really a co-owner in the legal sense of the term.” What? “Another thing, about the old building you purchased, the cost of renovations may be a capital expenditure.” What? “Before I forget, did you know that the money you spent to advertise your space for rent is generally considered a tax-deductible expense?” What?
The temptation is strong to just give the accountant all your papers: “Here, take care of it. It’s too complicated for me!” and wash your hands of it. Then doubt sets in as you lay on your pillow that night. No, you tell yourself, I have responsibilities as an owner, and I will assume them. It’s my duty to understand a minimum of what there is to understand. Continue reading →
Savings Account (TFSA) are two savings vehicles that each have their own objectives and advantages. However, which one is best for you?
When should you choose an RRSP?
The RRSP is most often used to build savings, tax free, for use at retirement. Tax on earnings is deferred until the funds are withdrawn from the plan, generally at retirement age. The RRSP is an excellent way to defer a portion of your salary in order to make up for any shortfalls in your income after you retire. Also, RRSP contributions can be deducted from your taxable income, which could lead to potential tax refunds.