Turbo tax online allows you to deduct moving expense more than your personal income.
For Eg if you earn 15000 in personal income and 25000 dividends in a year, and you moved to a different city to start your business incurring moving expense, Turbo Tax online is allowing me to deduct 16000 in moving expense exceeding my personal income of 15000. Isnt that a software bug? I found out that CRA rules dont allow your moving expense to exceed personal income. Ive already filed my taxes and realized this mistake. Should I be asking turbo tax for a refund?
When you completed the Moving Expense section (T1-M), you need to enter your "Net Eligible Income earned at your new location". Your moving expenses cannot exceed the amount which you have entered here, and only if you entered an amount which exceeds this would TurboTax allow a claim higher than the eligible amount.
Net Eligible Income is explained in this CRA link. 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-219-moving-expenses/line-219-you-employed-self-employed.html
If you feel TurboTax has made a calculation error, our 100% Accuracy Guarantee will cover it.
Hi Kim, Thanks for the quick answer. It does clear up some of the confusion. Im not sure if we need to manually enter the Net Eligible Income on T1-M form (line 22). I checked my return and found out that as you mentioned the eligible income is indeed higher than the Moving expense. Looks like that's why it allows to deduct the moving expense. But after carefully analyzing the T1-M form, I noticed that the net eligible income in line 22 on T1-M is exceeding the moving expenses in spite of the fact that the self-employed income in lines 135 to 143 are blank (i.e. 0) on the T1 form. That's what leads me to think there is something wrong in the calculation.