Tax tips for students Abbotsford BC
Tax tips for students
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(NC)-If you are getting a pay cheque, you are on the Canada Revenue Agency's radar screen. But if you also go to school, there may be ways to significantly reduce the amount of taxes you pay. Here are a few general tips for student taxpayers.
File a tax return. "Even if your annual income is small, it's never too early to start creating RRSP-contribution room," says chartered accountant, Stephen J. Allen, FCA, a partner with Loftus Allen and Co. in Oakville. "Make sure you complete a TD1 form and indicate the amount you'll spend on tuition," he advises. "You'll have less tax deducted from your pay cheque, and you won't have to wait until April for a refund." Always file a tax return each year that you work, no matter if it is full-time or part-time.
Deduct your moving expenses. According to chartered accountant, James J. Barnett, FCA, director, School of Accounting and Finance at the University of Waterloo, there are two important criteria you must meet. "You must be attending a school that's at least 40 kilometres from home, and you must be working while you're there - even if it's part-time," he explains. The cost of your rented moving vehicle, and any other moving expenses to get to school can then be deducted, and the same again when you move back home for the summer, providing you work while you're there, as well.
Track your tax credits. Students attending most universities and colleges are eligible to claim a federal education credit amount of $400 a-month for full-time enrolment and $120 per-month for part-time. "And they can claim a federal credit amount for textbooks - $65 for full-time enrolment; $20 for part-time - in addition to their tuition," clarifies Allen.
Transfer any unused (tuition) credit amount. "Do the math," says Barnett at the University of Waterloo. "If your tuition costs are greater than your annual income from summer and/or part-time jobs, you can transfer the unused portion of the credit amount to a parent, guardian or spouse who contributes to your support. The same applies to any leftover part of the textbook and education amounts. The total credit amount you can transfer is limited to $5,000 for federal purposes.
Or, you can carry any unused portion of these credits forward and deduct it when you start working full-time. But once it's carried forward it can't be transferred, and you must claim it in the first year you earn enough to pay federal tax."
Get help to deal with disabilities. There is a wide range of help available for post-secondary education, and different students qualify for different kinds of assistance. "The government and most campuses want to make it possible for anyone to go to university," maintains Barnett. "Most schools provide special services for students with disabilities at their locations."
If the school can't offer the help you need, the government just might. "If you're going to school and you have special needs, you can get almost anything you need - a computer, specific software, a shadowing assistant, or tutoring help - all paid for by the government," advises Allen. He recommends you check as to what kind of help they will offer in your particular case.
More information on this topic is available from a chartered accountant.