Crazy Income Tax Question

[Devlin]

A question for those of you who have moved and had a claim related to your move for income tax purposes.

I moved for a new civilian job in the course of my move I drove back and forth while trying to sell our home and find a new one, the kilometers built up quickly totaling 46,000km in the six months. Now according to this website http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/return/completing/deductions/lines248-260/255/rates-e.html

I'm allotted 48.5 cents per kilometer which when you multiply by 46,000 adds up quite quickly. Is this the correct way to claim this I've searched the CRA's website and can't find a limit on the number of kilometers you are allowed to claim.

Has anyone else been in this situation?

 

[George Wallace]

I see you have some wishful thinking.  It won't happen the way you are thinking.  It applies to a one-time, one-way trip from your old residence to your new residence, if this is in any way similar to what I have most often run across.  Don't forget that the Government is 'Cheap'. 

[Edit to clairfy my limited knowledge.]

 

[Devlin]

<snip from CRA website>

For example, if you drove 10,000 km during the year, and half of that was related to your move, you can claim half of the total vehicle expenses on your tax return.

</snip>

This is what led me to believe you could claim the total amount of kilometers built up during the relocation/move period.

 

[Blackadder1916]

For example, if you drove 10,000 km during the year, and half of that was related to your move, you can claim half of the total vehicle expenses on your tax return.

This refers to trying to claim more than the set kilometre rate if you feel that the expenses incurred in operating your vehicle exceeded that rate.  It would include the total of all gas, repairs, insurance, maintenance etc for the year and then applying the percentage that was legimately involved in the move.  If you claim more than the distance between your previous residence and the new residence there is a likelyhood of a review of your tax return by the CRA.  Though the T1-M form (calculation of moving expenses) is not attached and submitted with your paper return or sent electonically by efile, they have ways of identifying those pushing the envelope.  If you honestly believe that the mileage you put on your vehicle was legitmate, my best suggestion is to call CRA and speak to someone there specifically addressing this question before submitting your return.  If that individual either totally or partially agrees with you and you are subsequently audited, simply quote that individual (by name, date etc or better still to have him provide his opinion in writing) as your source for submitting such claim.

Some things you cannot claim:
http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/return/completing/deductions/lines206-236/219/deduct-e.html

expenses for house-hunting trips before you move;
expenses for job hunting in another city (such as travelling expenses);

Some things you can claim:
http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/return/completing/deductions/lines206-236/219/expenses-e.html

You can deduct reasonable amounts that you paid for moving yourself, your family, and your household effects. Not all members of your household have to travel together or at the same time.
travelling expenses, including vehicle expenses, meals, and accommodation, to move you and members of your household to your new residence (you can choose to claim vehicle and meal expenses using the simplified method;
costs for up to 15 days for meals and temporary accommodation near either residence for you and the members of your household

Plus you can seek the advice of a tax professional, they may or may not know what they are talking about, but they will charge you for the service.

 

[dapaterson]

I am not a tax accountant.  However, look at form T1-M (http://www.cra-arc.gc.ca/E/pbg/tf/t1-m/README.html) for more details on what can and cannot be deducted.

I know your mileage for a house hunting trip is not deductible; for trips back and forth trying to sell I am also leery, but do not know for certain.  Find a good tax professional to assist you in this.

 

[Devlin]

Thanks all I think I'll give the CRA a call to be certain and depending on what they say may go talk to tax professional. I'll update the thread when I get a firm answer on this

 

[rosco]

As per my current accountant:
  "one time one, way trip only!"
      As stated above

Sorry to be the messanger of bad news but we ran into the same situation last year

 

[Blackadder1916]

You can deduct reasonable amounts that you paid for moving yourself, your family, and your household effects. Not all members of your household have to travel together or at the same time.

It is possible to claim more than 1 trip/1way.  Can you substantiate you and your family travelling at separate times?  Were you required to go back to your original place of residence in order to pick up your family or household effects and transport them to your new residence? 

Any more tips and I may have to charge my hourly rate 

 

[Bzzliteyr]

Can we perhaps make this a thread about Tax questions?  If so I have two and a half:

Am I able to claim kit purchased at say.. CPGear as a "job necessity"?  What about the haircuts that I couldn't claim before as they were covered with "clothing upkeep allowance"?  If I have receipts, are they good to go now?

What about the whole common law people claiming as single, what say the tax gods on that one?

Discuss.

 

[dapaterson]

Haircuts are not deductible.  And CUA was never meant to pay haircuts etc - it was meant to purchase replacement DEU items, despite what local rumour mills promulgated to the contrary.

Your CP gear fetish is also not a deductible expense:

Line 229 - Other employment expenses
You can deduct certain expenses (including any GST/HST) you paid to earn employment income. You can claim the expenses only if your employment contract required you to pay them, and either you did not receive an allowance for the expenses, or the allowance you received is included in your income.

Note
Most employees cannot claim employment expenses. You cannot deduct the cost of travel to and from work, or other expenses, such as most tools and clothing.

http://www.cra-arc.gc.ca/E/pub/tg/5000-g/5000-g-03-06e.html#P952_122406

 

[Bo]

I'm gonna bump this thread up with my own tax question.

I recently owed $500 on my provincial taxes because I was posted in Ontario from January-September then transferred to Quebec for the remaining tax year. Since Quebec was my place of residence as of December 31, I had to pay Quebec taxes for the whole year! If it wasn't for my RRSP contributions and some tuition payments, I would have owed much more.

Does the government grant military personnel any kind of tax break from moving to higher taxed provinces? Or would the military compensate us? I can't imagine what it would be like for someone posted to Alberta for 11 months then get posted to Quebec in December 

 

[geo]

You get your cost of living adjustment payment every pay?

 

[PMedMoe]

Does the government grant military personnel any kind of tax break from moving to higher taxed provinces? Or would the military compensate us? I can't imagine what it would be like for someone posted to Alberta for 11 months then get posted to Quebec in December 

:rofl:  Sorry.....

 

[aesop081]

Does the government grant military personnel any kind of tax break from moving to higher taxed provinces? Or would the military compensate us? I can't imagine what it would be like for someone posted to Alberta for 11 months then get posted to Quebec in December 

You're funny......

When i moved from Alberta to New Brunswick i got a $2300 tax bill.......

You dont get a break, you dont get compensated

 

[retiredgrunt45]

When claiming any kind of exemption , wether it be mileage, disability, is done pro rated and not actual. Say for instance you claimed your spouse for disability for simplicity sake. The amount you claim is $5600.00. The "actual" amount deducted from you net income owing depending on what it is, I'll say maximum is only pro rated at $300.00, so this deduction will only be worth $300.00 of your net tax owing, so if you paid $6000.00 over 12 months in tax deductions that $5600.00 tax deduction will only net you 300.00 in real deductions, bringing your net tax paid to $5700.00.

You must remember the tax deductions are based on a percentage value of the actual deduction itself and each deduction has its own set of values, which are predetermined by the treasury department and revenue Canada, its what we refer to as the "tax bracket" system. Say for instance you have an allowable deduction of $5000.00, you can claim that deduction, but the actual percentage may be only 10% of that deduction of $5000.00 depending on how much your income was for that particular year, lower the income, higher the percentage for that deduction and so forth. If you only made for instance $20,000.00 for the year, you could claim 80% of that deduction and receive everything back you paid in income tax over the year. More money you earn, less deductions percentages you can claim, unless you have met your maximum for RRSP contributions or have other tax relief strategies. "Or if your rich" your tax deduction is 100% deductable, because of maximum utilization of tax shelters or other shady dealings.

There is a section for real estate deductions in the guide but it is complicated on what you can deduct on real estate costs or occurrences. Myself I usually take mine to a tax professional who has the software necessary to take advantage of the latest tax deductions available to me for the year in question and can always get me the maximum bang for my buck, so to speak.

Read your tax preparation formula's in schedule 1 of your guide. It will have all allowable deductions and what they represent in actual dollar value against income earned for that year.

You drove 46,000Km, but you Will never be able to claim 100% of that distance, look at maybe 10 to15 % of actual deduction value, again it all comes back to "how much" you earned for that year. Higher the income, less deductions, unless of course you can take advantage of tax shelters like RRSP's, "Or if your rich" your tax decution is 100% deductable, because of maximum utilization of tax shelters or other shady dealings.