Anyone who has ever undertaken a big move knows how chaotic it can be to pack up your whole life and relocate. Much of the time, we wonder how we ended up with so much stuff. Costs can pile up quickly when you have to move everything you own, as well as yourself, and your household, sometimes hundreds of thousands of miles away to a new location.

If you are moving for work, whether your household or your place of business, then your house and office moving expenses could be tax-deductible. Use the information below to help you manage the big move, and take advantage of our downloadable business moving checklist and information on tax-deductible moving expenses.

Questions to Ask Yourself When Moving Office

The logistics of moving business and home can be overwhelming if you don’t know where to start. Answering the questions below will give you a better idea of what is required to move your business or office space successfully

What are moving expenses?

Moving expenses are any costs incurred from moving a home or business from one location to another. These expenses can include the cost of moving services, packaging and moving materials, equipment rentals like moving vans and dollies, and even meals and temporary accommodations.

It’s important to keep track of all moving costs incurred when moving to a new location for work or to start a business, as they can be claimed back on your personal income return or company tax return.

How much do movers cost?

How much you pay in moving expenses will depend on how much you have to move and how far you have to move it. The average cost of movers in Canada can range from $600 to $2000 depending on the services used.

Will you pay for professional moving services to pack and move your belongings, or will you do it yourself? Do you need to hire a truck, does it come with the services, or are you going to need a different vehicle like a boat for travel abroad? Will you need to pay any fees for cross-border travel? What about accommodations and meals for you and your household during the move?

These are all questions that can help you determine how much the move in total will cost you. You should keep a detailed account of all costs associated with the move in order to take advantage of the CRA’s moving tax credit and eligible deductions.

Are there any relocation benefits if you are moving for a new job?

When moving for a new job, sometimes the hiring company will provide relocation benefits like an allowance for moving costs. It is important to keep evidence of finances given to you by your employer for this purpose. This information will need to be included in your income return to claim your moving expense deductions.

Are moving expenses tax deductible?

Like other business operating expenses that are deductible , relocation costs can be claimed back on your tax return. The Government of Canada may provide some incentives for employees and self-employed individuals who have relocated and established a new home for work. Whether employed or running your own business, you may be eligible to claim your moving expenses back on your return. 

To successfully make a deduction on the costs incurred from relocating house, you must:

• Be a deemed or factual resident of Canada
• Moved during the year as a result of a new job or business venture
• Established your new home at least 40 km closer to your new place of work than your previous home was
• Earned self-employed income or employment income at your new place of business
• Are moving within Canada, have come from outside Canada to work within the country, left Canada for a position, or have moved between two locations outside of Canada

This moving expense deduction also applies to any full-time student enrolled in a Canadian post-secondary program.

How to Deduct Business Moving Expenses

To deduct any costs associated with moving business, you will need to complete Form T1-M, Moving Expenses Deduction. The form will help you calculate the total eligible amount of moving expense deduction you can claim on your personal income returns. Fill in the amount on line 21900 of your return.

If your new company of employment provides reimbursements or an allowance for relocation expenses, then you must include the amount you received in income on your return to successfully claim this deduction.

It is important to note that if the relocation costs paid in the tax year of your move are more than your net eligible amount of taxable income, you can carry those deductible expenses into the following year’s return. If you paid for your business moving expenses in the year after the year of your move, you can claim them back in the year you paid for them.

List of deductible moving expenses

Business moving expenses that you are able to deduct on your income returns include:

• Transportation and travel expenses: any vehicle used to transport household items, as well as any travel costs of moving you and your household including vehicle expenses, meals, and accommodations.
• Storage costs: any in-transit storage and insurance needed to move to the new location
• Temporary living expenses: deduct a maximum of 15 days of accommodations and meal costs of you and your household whether living near the old or new home
• Lease cancellation: expense incurred from cancelling your old home’s lease to move, does not apply for any period before the cancellation of the lease
• Cost of maintenance for the old home when vacant: deduct a maximum of $5,000 covering the time when you have moved and are making reasonable efforts to sell the house, including the cost of heating and utilities, interest, property taxes, and insurance premiums
• The expense of selling your old home: covers the cost of advertising, real estate commissions, legal fees, and mortgage penalties

When claiming back these relocation expenses, you have the option to use the detailed method or the simplified method of calculation. Choosing the detailed method means calculating the actual and total amount of all associated moving costs, showing all receipts as evidence of the claim in order to deduct moving expenses at the exact amount.

For the simplified method of deductions, you can claim meal expenses as a flat rate per person, without providing detailed receipts as evidence. However, the CRA may still ask for the receipts as supporting documentation for the claim, so it is best to hold on to them.

To claim vehicle expenses using the simplified method, multiply the number of kilometres driven by the cents/km rate from the province or territory where you began your move. Again, the CRA has the right to ask for any evidence to back up these claims, so keep all of your moving receipts safe.

List of nondeductible moving expenses

Moving expenses that cannot be deducted from your tax returns include:

• Travel expenses for house hunting or job hunting
• Renovation and repair costs of home to get it ready for sale
• Cleaning and repair expenses for rental homes
• Costs of mail-forwarding services
• Value of items that you’re moving services do not handle, such as plants, weapons, paint, and cleaning and chemical products
• Mortgage default insurance
• Cost of delays in selling the home for investment or market purposes, as well as any losses in the sale of your home

Moving Expenses Checklist

Moving business and household is a huge undertaking. Feel free to download this business moving checklist to help you stay organized during the relocation process.

Software That Can Help

With so many things to keep track of when moving home and business, why not use software to help make the process easier. Accounting software is the perfect tool for self-employed individuals and business owners looking to relocate for their work. Manage expenses, organize and store receipts, and maximize your moving tax deductions with QuickBooks Online.

Try it free today to start getting your finances in order and easily deduct moving expenses on your return.