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Deducting Moving Expenses for School
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|Pursuing a post-secondary education can be an expensive endeavor, particularly if you have to relocate to go to school.
Thankfully, some moving expenses can be deducted from your taxes at the end of the year if you are a student moving to achieve your academic goals.
Who can deduct
Much like professionals who often relocate for work, post-secondary education students are also eligible for deductions if the following is true:
- You moved 40 kilometres closer than your previous residence to the school you're attending
- You are classified as a full time student (i.e. you are taking at least 60 percent of the course load for the program)
- You are receiving a Co-operative Education (Co-op) as part of a work program
- The university/college/educational institute (within Canada or not) you are attending offers courses with a level equivalent to that of post-secondary school
How deductions work
If you happen to be moving from one location to another at the start of each academic year you can claim moving expenses for the beginning of the academic period.
This also applies when you move back after summer break or a work semester if you are a Co-op student.
Said deductions however can only be made based on income you received that was taxable, such as:
- Research grants
TIP: If your moving expenses are more than your taxable income you can carry these deductions into the following calendar years.
Moving outside of Canada
For the most part, moving expenses are only considered deductible if you move to or within Canada, unless these stipulations apply to you:
- You are a resident of Canada (including deemed or factual residents) living outside of Canada
- Factual residents do not live in Canada but maintain residential ties to Canada
- Deemed residents do not have residential ties but during the tax year were a member of the Canadian Forces, the Canadian Forces overseas staff, a government employee posted abroad, someone working for the Canadian International Development Agency (CIDA) or are someone who falls into any of these categories
- Your new residence is where you "ordinarily reside," meaning you sold or moved out of your old home to relocate to this one
Plenty of moving expenses will be considered deductible on your taxes. These include any money spent during your move to school on:
For gas and meal expenses you have the option of expensing the actual cost (the "detailed method") or choosing to be reimbursed a flat rate (the "simplified method") for your travel. Flat rates are updated annually and can be found on the Canadian Revenue Agency (CRA) website.
- Physically moving yourself, your home and your family (including the price of hiring a moving company or storing your belongings)
- Travel expenses including those used to run and operate your vehicle
- Meals and travel fees for you and your family (up to 15 days on long distance journeys)
- Legal fees you may have accrued from your new home if you sold your old one
- Charges you incurred because you were forced to cancel the lease at your old residence
- Selling your old home (legal fees, real estate charges, etc.)
- Running your old home while it remained vacant (this pays up to $5,000)
- Disconnecting your old utilities and hooking up new utilities
- Miscellaneous moving expenses (changing your address, getting a new driver's license, etc.)
TIP: Choose to deduct the actual cost or the flat rate cost depending on which option gives you back the most money.
Expenses not covered
Unfortunately, not all expenses are covered when you move to pursue a full time post-secondary education.
Items that can't be deducted are:
- Travel expenses that occur while looking for a new home
- Any money you lose because you delayed the sale of your home
- Cash spent on fixing up your old residence for a landlord or to sell your house
- Replacement items for belongings that movers left behind (plants, dangerous goods, etc.)
- Money spent to replace "personal-use items" (blinds, curtains, carpets, etc.)
- Mortgage default insurance
- Transformers/adapters needed for household appliances
Claiming on your tax return
As for where you file these deductions, you can claim all eligible moving expenses on the T1-M form, also referred to as the "Moving Expenses Deduction" form.
Good luck, and if you have any questions the CRA website is a great place to start.