Midwives - Relocating to another province? Your moving expenses could save you THOUSANDS in tax.

There has been a small trend of midwives moving to BC or Alberta. Either fresh out of school or perhaps as a job relocation.

There are many reasons for this ranging from income (The "level" system doesn't quite exist the same way so midwives get paid more in those provinces often. This is especially true for recent graduates) to quality of life (the call schedule/shift work is different).

This is important because there is specifically a tax rule that if you relocate specifically for work and you move more than 40km closer to your new place of employment - then you are allowed to deduct moving expenses.

For midwives moving across a province there are a LOT of moving expenses that might incurred such as :

• Cost of driving a vehicle/rental truck (gas AND meals can count here)
• Airfare
• Cancelling a lease
• Selling a property
• Buying a new property
• in some cases temporary lodging in your new place as well as costs to maintain your old place for a period during this transition.

I have reviewed expenses for midwives and this set of moving expenses can truly be thousands of dollars of expenses.

For a midwife moving from Ontario to BC and working full time - these costs will likely be deductible at a 40% tax bracket minimum.

This means that $5000 of moving expenses can result in $2000 of savings or more.

If someone was driving their vehicle out there as an example - to move from The Hamilton Midwives (Chosen because that's who delivered my children) to the "Downtown Midwifery Practice" in Vancouver - that's 4000km of driving!

Now - CRA will allow you to use the simplified method for this - meaning you can keep a log of your driving and say "i drove this much to the relocation" which - if you are starting in Ontario means you can clock 60.5 cents a km: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-25500-northern-residents-deductions/meal-vehicle-rates-used-calculate-travel-expenses.html

That means for 4600 km of driving - $2601 of mileage cost. Also that's through the USA. If you are forced to take a longer route through Canada - well - there is justification and potentially the cost can go up.

Additionally - the cost of lodging/meals can be justified here. Assuming it takes 5 days of driving (8 hr of driving a day) - at $23 per meal - that would be another $345.

So we are at $2946 on this portion alone. If you hire movers - that's another cost. If you are a student hopping on a plane to get out there (no vehicle or maybe you have a beater that you sell and choose to relocate) your costs will look different - but plane tickets and short term rentals while you look for your permanent place are not cheap either.

So in summary:

1) Can your moving expenses total thousands of dollars when you are moving to another province? EASILY

2) Is documenting that and working with your accountant to determine what costs can be included in your return? Definitely - we're talking thousands of dollars of savings.

If you are relocating and this is something that you want to chat more about? Reach out any time!