If you are a Canadian taxpayer, then you are likely familiar with the annual ritual of filing your tax return. One of the most important sections of your tax return is Line 21200, which deals with claiming deductions for moving expenses. If you have recently moved to a new home or changed your place of work, then you may be eligible to claim these deductions.
In this blog post, we will provide you with everything you need to know about Line 21200, including how to claim deductions for moving expenses, who is eligible to claim these deductions, and what expenses can be deducted.
Who is Eligible to Claim Deductions for Moving Expenses?
If you have moved to a new home or changed your place of work and your new home is at least 40 kilometers closer to your new place of work than your old home, then you may be eligible to claim deductions for your moving expenses. This rule applies to both employed and self-employed individuals.
What Expenses Can be Deducted?
The Canada Revenue Agency (CRA) allows you to deduct a wide range of moving expenses, including the following:
- Transportation and storage costs: You can deduct the cost of transporting your belongings to your new home, including the cost of renting a moving truck, hiring a moving company, and storing your belongings in a storage facility.
- Travel expenses: If you have to travel to your new home to complete the move, you can deduct your transportation and accommodation costs.
- Cost of selling your old home: You can deduct expenses related to the sale of your old home, such as real estate commissions, legal fees, and advertising costs.
- Cost of purchasing a new home: If you have purchased a new home, you can deduct certain expenses related to the purchase, such as legal fees, land transfer taxes, and mortgage penalties.
- Temporary living expenses: If you have to temporarily live in a hotel, motel, or rental property while waiting to move into your new home, you can deduct the cost of these expenses.
How to Claim Deductions for Moving Expenses
To claim deductions for moving expenses on Line 21200 of your tax return, you will need to fill out Form T1-M, which is used to calculate your moving expenses. You will also need to keep all your receipts and documentation related to your moving expenses as proof of your expenses.
Conclusion
Line 21200 on your tax return is an important section that can help you claim deductions for your moving expenses. If you are eligible to claim these deductions, it can result in significant tax savings. Make sure to keep all your receipts and documentation related to your moving expenses and fill out Form T1-M accurately to claim these deductions. If you have any questions or doubts, it is always a good idea to consult a tax professional to ensure that you are claiming all the deductions you are entitled to.