For students with very little income, filing a tax return can offer big advantages other than a refund, since it's the only way to receive all benefits available. Here are eight reasons why every student should file a tax return:
2. Build RRSP Contribution Room: Students with a part-time job or a summer internship can build valuable RRSP contribution room for use in future years. Carrying forward unused room allows you to make bigger deductions in future years when you're in a higher tax bracket. Read the 5 Minute Guide To Your RRSP to get the rules.
3. Claim Tuition Fees: You can claim tuition fees for recognized post-secondary courses taken at a college or university. Be sure to save form T2202A - Tuition, Education and Textbook Amounts Certificate issued by your school to claim this sizable tax credit.
4. Get the Education Amount: Full-time students can claim $400 for each eligible month of attendance at college or university while part-time students can claim $120 per month.
5. Claim the Textbook Tax Credit: Buying books is not cheap, so don't miss out on this non-refundable tax credit for textbooks. Full-time students can claim $65 for each eligible month while part-time students can qualify for $20 per month.
6. Carry Forward or Transfer Student Credits: Students who do not fully use their tuition fee and education amount can carry forward the unused portion and apply it against income in future years. Alternatively, this unused amount can be transferred to a parent, grandparent, spouse, or common-law partner. The maximum amount that can be transferred is $5,000 per year.
7. Claim the Public Transit Amount: Students travelling by local buses, streetcars, subways, commuter trains, or local ferries can claim the full amount paid for a public transit pass during the year. Be sure to save your transit receipts to prove your method of travel. See the CRA's rules for the public transit amount to file correctly.
8. Deduct Moving Expenses: Full-time post-secondary students can deduct moving expenses from part of their scholarships, fellowships, bursaries, certain prizes, and research grants. There are lots of rules for this deduction, so check out the CRA's student moving expenses page to see if you qualify.
Your Turn: Got a student tax tip? What's your favourite student tax benefit?
I filed my taxes both federal and provincial and the way I calculated that there was a refund. To my surprise I had to pay back to both. I realized that the way the taxes are made are to steal our money. Now I have to pay back to both. Not only that I have to pay back but I am being harrased by the mminister of revenue to pay back at their date. If not I will be penalized and interest will be added. This is the last time that I am filing my taxes. I am working too hard to support the corrupted politicians.
Posted by: anna | 04/20/2010 at 04:44 AM
Good for you, don't file your taxes!
Then when Revenue Canada finds out they can take you to court, give you a criminal record, and penalize the crap out of you.
Of course then there will be the constant audits year after year.
You will make a great role model!!
Posted by: Sean | 04/20/2010 at 07:58 AM
I no longer understand why we file income taxes. It would be much simpler if we all paid a consumption tax. The more you spend the more you are taxed, that's it. This way you could eliminate all of the bureaucrats with their guaranteed cushy jobs and their attitudes when it comes time to renegotiate their already ridiculous salaries, not to mention all of the over priced office space with the best furniture possible. When it comes down to it there is only a small portion of people who pay a large portion of the taxes, this way it would be spread out over everyone and the very rich would no longer have loop holes and the very poor, well we could always figure out to help them. That is not the problem. It is the middle class paying too much and the wealthy not paying enough. JMO
Posted by: Bernard | 04/20/2010 at 08:14 AM
debunking tax myths:
http://www.cra-arc.gc.ca/nwsrm/myths/menu-eng.html
Posted by: 10% Club | 04/25/2010 at 03:17 PM
For those not in the know, Canadians can exempt themselves from the paying of income tax. A couple of letters will do it. There is no recourse for CRA or the Minister of National Revenue because they are perpetrating a crime in commerce upon your person. In other words committing fraud against you. It's all about brainwashing the masses folks, but finally, people like you and me are sick of taxes and corruption.
So many people live in fear of the taxman but there is another way. Tax lawyers, accountants, bankers, finanacial advisors are all cut from the same cloth and are educated to keep you in the system as a debtor for life.
You have to re-educate yourself to do this detaxing. A great read is at cyberclass dot net.
Posted by: John | 04/25/2010 at 05:58 PM
I believe the CRA recourse would be called "Requirement to Pay"! They freeze all your assets, put lien on your home. This affects your relationship with your bank and Mortgage provider. Good luck with refinancing or renewing your Mortgage when there is a lien on your home. Taxes suck, I however enjoy the option of getting a better Mortgage rate without worrying about the taxman preventing it.
Posted by: Crystal | 05/12/2010 at 03:17 PM
John - Canadian citizens cannot "exempt" themselves from paying taxes. Income tax is legislated. That means laws have been passed and put into place. These are outlined in the Income Tax Act and Excise Tax Act. "Tax Protestors" are misinformed and do nothing but urge taxpayers to break the law, thus subjecting themselves to prosecution. Check your facts before you give out tax advise. In fact, why not leave that to the accountants?
Anna - failing to file tax returns does not exempt you from having to pay taxes. CRA will file your returns for you, and then take legal action against you to collect the debt. You may want to do some tax planning ahead of time to prevent you from having to pay at year end.
All good citizens are required to contribute to the adminstration of our country. Our infrastructure, security, education and healthcare depend upon it. These are the costs of living in the best country in the world.
Posted by: sickofwhinging | 08/27/2010 at 06:05 PM
RE: 8 above...Moving Expenses- This is a good deduction, but READ the fine print in CRA Interpretation Bulletins first. By the way, sholarships, fellowships and bursaries are NOT taxable income, so there is no need to deduct anything against these!
Posted by: Student 1 | 03/13/2011 at 09:57 AM
This affects your relationship with your bank and Mortgage provider. Good luck with refinancing or renewing your Mortgage when there is a lien on your home.
Posted by: ClubPenguin | 03/30/2011 at 08:41 PM
Good points! I see most young people are not well informed and they don't even know there are so many options out there to ease the burden of a student debt.
Posted by: RoadOutOfDebt | 05/27/2011 at 05:26 AM
These are some good tips to get rid of your study debt. Mine will take a long time to resolve so any help is always welcome!
Posted by: automatenspiele | 01/11/2012 at 02:27 PM