Tax deductions are a great way to get more out of our tax returns. However, keeping track of what you can and can’t deduct from your taxes can be confusing—and it doesn’t help that it seems to change on a yearly basis.
Many of us rely on the help of a storage unit to store important items that are related to our business. So it would beg the question: can you write off the costs associated with a storage unit on your income tax returns?
Can You Claim the Cost of a Storage Unit on Your Taxes?
Yes, you can—although the answer to cost is not as simple as that.
If this comes as a surprise to you, you’re not alone. Many Canadians overlook the fact that you can write off the costs of a storage unit on their taxes. However, there is actually a form that is dedicated to the writing off of moving expenses, known as the T1-M Moving Deduction Form.
When are Moving Expenses Tax-Deductible?
In order to be eligible to write off your moving expenses, you will have to first fit a variety of criteria, such as:
- You moved away to start a business
- You’re employed and you moved to be closer to your place of employment
- You moved from a location within Canada to another location within Canada
Students may also be able to claim moving expenses on their taxes if they moved away to attend school on a full-time basis. It is important to note that you will not eligible for this tax write-off if your business already existed before your move, or if your business can be operated from anywhere.
What Kind of Moving Expenses are Tax-Deductible?
Here is a breakdown of the specific kind of moving-related expenses that you can deduct on your taxes:
- Transportation costs, such as movers, car rentals, gas, etc
- Packing supplies (boxes, tape, etc)
- Storage costs, provided you are storing furniture or other items that would otherwise be in your home
- Insurance expenses incurred to protect belongings
- Meals and accommodations while in transit to a new location (up to 15 days)
- Costs of breaking a lease
- Costs of maintaining an old residence, if required (the government caps this at $5,000)
- Practical costs related to the move, such as the changing of address on your government documents or the transfer of utility services
- Cost of selling a property (such as advertising, legal fees, mortgage penalties)
- Cost of buying a property (same as above)
Important: if your company has reimbursed you or paid you for the costs of your move, this is considered income and must be declared on your tax return. It does not, however, mean that you cannot also claim moving expenses on your income tax. You just must include both the reimbursement supplied by your employer as well as your moving costs.
Some moving expenses that are not tax-deductible include mortgage insurance, any loss you take in selling your house, mail forwarding, and hazardous goods that cannot be moved and must be left behind.
The Bottom Line
While you will not be able to write off the cost of a storage unit on your taxes if you are using it on a permanent basis, you will certainly be able to write it off if you are using a storage unit to help you temporarily store belongings during a move. Remember to always keep both physical and digital copies of your receipts in the event that the CRA performs an auditor asks you for proof of certain expenses.
Annacis Lockup Has Your Storage Unit Needs Covering in Vancouver
If you are looking for a secure and clean play to store your belongings, the New Westminster storage unit offers a safe, climate-controlled collection of storage units in a variety of sizes. Get in touch with them today to see how they can accommodate your storage needs at a price that works for you.