As a student, it’s important to be aware of the various tax credits available to you. These credits can help offset some of the expenses associated with your education and reduce your tax liability. Filing a tax return is a way for taxpayers to report their income, deductions, and credits to the government and determine if they owe any taxes or are eligible for a tax refund. The main reason for filling a tax return is to ensure compliance with the tax laws and regulations and to pay the correct amount of taxes owed.
In addition to compliance, there are several benefits to filing a tax return. One of the most significant benefits is the opportunity to receive a tax refund if the amount of taxes paid is greater than the amount owed. Filing a tax return also allows individuals to take advantage of various tax credits and deductions, which can help reduce their tax bill.
Furthermore, filing a tax return is often a requirement for accessing government programs and benefits such as the Canada Child Benefit, the GST/HST credit, and the Working Income Tax Benefit. It is also a requirement for many financial transactions, such as applying for a loan or a mortgage, and for obtaining a passport or a visa.
In conclusion, filing a tax return is a crucial process for individuals and businesses in Canada. It helps ensure compliance with the tax laws, provides access to government programs and benefits, and can result in a tax refund or a lower tax bill.
Here are some of the most common tax credits for students:
Tuition, Education, and Textbook Amounts: This credit can be claimed for tuition and examination fees paid for courses taken at a post-secondary institution, as well as for textbooks.
Student Loan Interest: If you have a student loan, you can claim the interest paid on that loan as a tax credit.
Moving Expenses: If you moved more than 40 kilometers to attend school, you may be eligible to claim certain moving expenses.
Home Accessibility Tax Credit: This credit can be claimed for expenditures related to making your home more accessible for a person with a disability.
Canada Employment Amount: If you had employment income in the year, you can claim this credit, which provides a tax credit for employment income.
It’s important to note that the availability of these credits and the specific eligibility criteria can vary from year to year, so it’s always a good idea to consult a tax professional or the Canada Revenue Agency for the most up-to-date information. Additionally, make sure to keep records of all relevant expenses, as they may be required to support your claims.
If you are a Canadian tax resident and study abroad at a foreign university, you can claim tax credits for the tuition fees paid to the foreign institution. To claim this credit, the foreign institution must complete Form TL11A, which verifies the amount of tuition paid. This credit is also available to students who take online courses from a foreign university while residing in Canada.
Keep in mind that, up until 2016, simply being a full-time student at a foreign university could earn you up to $837 per year as a tax credit, regardless of the amount paid in tuition. As of 2017, credits are only available for tuition fees that were actually paid. If you have missed this credit in previous years, it is still possible to adjust your tax return to claim it.
As student, you can also defer your tuition fee. Deferral of Tuition Fees is a tax credit available to students in Canada who have paid tuition fees for their education. This tax credit allows you to defer the amount of tuition fees paid in a given year to a future year when you expect to have a higher income. This deferral can help you save money on your taxes and reduce the amount of taxes you need to pay each year.
To claim the Deferral of Tuition Fees, you need to have a T2202 form for each year that you were a full-time student. This form will indicate the amount of tuition fees you paid in that year and can be used to calculate the tax credit.
It’s important to note that different provinces in Canada have different rules for the Deferral of Tuition Fees. In Quebec, for example, the deferral must be manually transferred each year and it’s important to keep track of the amount of deferred tuition fees to avoid losing money.
It is also important to note that filing your tax return with the help of a professional, such as an Accountant, can help ensure that you do not miss any important information requests from the CRA. This can help prevent any potential issues or delays in receiving your tax credits as a student.