Are you able to reduce the amount of tax you owe? If you had to move to attend medical school as a full-time student, you may be able to claim your moving expenses as a deduction from your taxable income.
If you moved at least 40 kilometers (by the most common public route) to spend most of your time, or ‘ordinarily reside’, at your university, you can include moving expenses when filing your tax return. Previously you could only claim expenses for moving within the country, but now international moves are included as long as you are a ‘factual resident of Canada’. Factual residents of Canada maintain their Canadian passport, driver’s license, bank accounts, and credit cards while attending school abroad.
Expenses that you can claim include any ‘reasonable’ cost you paid to move yourself, your spouse, or your children – even if they moved at a different time than you – and their possessions. According to the Canada Revenue Agency, ‘reasonable’ costs include:
- Transportation and storage costs, like movers, packing, storing, and delivering.
- Travel expenses while moving such as gas, meals, and accommodation for yourself and family members who also moved. For a simpler way to track these expenses, use the flat daily rate for meal expenses and a per-kilometre rate.
- Living expenses – 15 days maximum – including meals and accommodation for yourself and family members who also moved.
- The cancellation cost of the lease of your old home (excluding rent for the months you lived there).
- Up to $5,000 for maintenance of your owned home in the vacancy between your move and the time it sells. This covers mortgage interest, property taxes, house insurance premiums, utility costs, and the costs of buying a new home and selling your old home (if sold in order to move).
- Costs involved with changing your address, replacing your driver’s license, utility disconnections, and hook-ups.
How to Claim
In order to claim moving expenses, you’ll have to fill out the T1–M Moving Expenses Deduction which is included in your tax filing package. Here you’ll identify your old and new homes, the distance between them, the date and reasons you moved, and all of the expenses involved.
In case the CRA requests more information to support your claim, it’s a good idea to keep a record of all your receipts.
Full-time students can deduct moving expenses from scholarships, fellowships, bursaries, some prizes, and research grants that you have to report as taxable income. Even still, students don’t usually have much taxable income. Fortunately, you can ‘carry forward’ expenses to receive a deduction from a future year when you do have taxable income.
You can claim and deduct the same kinds of expenses if you move for residency or another reason for earning employment income.
Consulting with a tax professional can be helpful if you’re not sure whether you qualify for a moving expense claim.
Claiming moving expenses as a tax deduction can take some stress out of the life of a med student, especially those with families. Having these costs taken care of will make the sacrifices you make worth it.
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