The deadline for 2015 personal income tax filing is April 30, 2016. Unlike many other countries, individual income in Canada is taxed based on the residency, not citizenship. In other words, international students who reside in Canada on December 31 need to declare their income.
Here are eight important to know tax tips for students in order to get the most out of the tax return:
1. Even if you did not work and earn any income during the tax year, it could still benefit you to file your taxes because you are likely eligible for the GST/HST credit. You will receive money from the government, approximately $200 per year. This credit is intended to offset partly GST/HST paid during the tax year by individuals with low to moderate incomes. The credit is paid 4 times during the year (January, April, July, and October).
2. Amounts received for scholarships, fellowships, bursaries, study grants are completely not taxable if it is received in connection with student enrolment in a full-time program. If the student is enrolled in a part-time program, the amount of scholarship that is tax-free limited to the tuition fee paid, the cost of program related materials and $500.
3. The student can claim to refund their tuition fees, except those paid by government or employer. For this purpose, a student must have official income tax receipts (Form T2202A), issued by TRU that you can find in mytru account under My Academic Record.
4. In addition to tuition amount, students can claim Education and Textbook Amounts. These amounts are fixed, no matter how many books you bought and how expensive they were. However, these amounts can slightly change from year to year by the provincial and federal government. For example, in 2014 educational amount was $400 per each month of studying and textbook amount – $65 per month for full-time students. For part-time students, these amounts were $120 and $20 per each month respectively, for the updates check Canada Revenue Agency (CRA) website.
5. The amount of tuition, education and textbook amounts must be applied first to reduce student’s tax burden to zero. The amount that you can actually receive depends on your taxable income minus total non-refundable credits. If your income is not sufficient to cover your non-refundable credits (around $11,138 and up, depends on an individual case), you will not be able to claim your full tuition amount, education and textbook amounts, but you can carry it forward to the following years. However, after graduation, when you will get a well-paid job, you will be able to receive a big refund from the government because you are a smart cookie and carried forward your tuition in time! You can also transfer up to $5000 to a spouse, common-law partner, parent, grandparent, or same relatives of your spouse, restrictions apply if your spouse claims a spousal amount.
6. In a case of moving at least 40 km within Canada for work, or to begin full-time attendance at a post-secondary institution, taxpayers are eligible to claim moving expenses for the year the moving took place or the following year. Moving expenses include the cost of canceling utilities, at your previous residence, or connecting them at your new one; fees incurred by cancelling a lease; up to 15 days of lodging near the previous or new residence; the cost of storing your belongings because of the move; travel costs, including meals and accommodations and some other costs.
7. Students may claim a non-refundable tax credit for the cost of their public transit passes during the tax year, but it is important to keep the receipts of purchase.
8. Students who finance their post-secondary education with student loans, may claim a non-refundable tax credit for interest paid on loans obtained under Canada Student loans Act or any similar provincial laws in the year the interest was paid, or in any of the following five years.
You might consider using services of trained tax experts that will help you to find all of the student deductions that you are eligible to and help you get the most back. The main companies providing expert tax services in Kamloops represented below:
Some of these companies provide courses and education for the population to increase tax awareness that could also be a good career opportunity for students.
Happy tax filing!
Canada Revenue Agency. (2015). Students. Retrieved from Canada Revenue Agency: http://www.cra-arc.gc.ca/students/
Kerner, R. (2015). Fundamentals of Income Tax. H&R BLOCK.