Tax Tips For College Students

If you’re a college student in Canada, you might not think much about taxes, but you should! Knowing how to file correctly and taking advantage of student tax credits can help you keep more money in your pocket.

This article offers valuable tax tips specifically designed for students, helping you maximize your tax situation.

File Your Taxes Even With No Income

Even if you didn’t work much, always file a tax return. Why, you may ask? Because:

• You may be eligible for a tax refund due to tuition credits or other benefits.
• It helps build up unused tax credits you can use in the coming years.
• Filing early means you won’t miss out on government benefits like GST/HST rebates.

Claim Tuition Tax Credit

If you’re paying tuition, you can claim a tuition tax credit, which reduces the tax you owe. If you don’t need the credit now, you can carry it forward when making more income later.

Get your T2202 form (Tuition and Enrolment Certificate) from your school. You need it to claim tuition credits.

Transfer Unused Tax Credits To A Parent

If you’re not using your tuition credits immediately, you can transfer up to $5,000 to a parent, grandparent, or spouse. This helps them lower their taxes while allowing them to carry the rest forward for future use.

If your parents help with school expenses, this is a great way to give them some tax relief.

Canada Training Credit

• You can claim up to $250 annually for training courses.
• Check your CRA MyAccount to see how much you can claim.

Utilize the GST/HST Credit: Quarterly Payments

Students who file a tax return and are 19 years or older may qualify for the GST/HST credit, which helps offset living expenses. You’ll receive payment every three months.

To qualify, you must file your taxes, even with no income.

Claim Student Loan Interest

If you’re repaying government student loans, the interest you pay is tax-deductible.

• Private loans, lines of credit, and loans from family members don’t qualify for this deduction; only government-issued student loans do.

Maximize Education Savings Plans: RESP Contributions

Contribute to a Registered Education Savings Plan (RESP) to benefit from government grants and tax-deferred growth. Withdraw funds strategically to minimize taxes during the student’s college years.

 Moving Expense Deductions: Eligibility

Students moving for school or work may be eligible to deduct moving expenses, provided they meet specific criteria.

If you move at least 40 km or more for school and later get a job at your new location, you can claim moving expenses like transportation, storage, and temporary accommodations.

You can only deduct these costs against taxable income, so keep your receipts and track your expenses.

Keep Detailed Records: Documentation

Maintain records of all tuition payments, scholarships, bursaries, and other relevant financial documents. Accurate records ensure all eligible credits and deductions are claimed.

By following these tax tips, college students and their parents can optimize their tax situation and reduce their tax burden. Understanding and utilizing these strategies can bring you financial benefits.

Checklist: Tax Tips For Canadian College Students

• File your taxes every year (even if you have no income).
• Claim your tuition tax credit (get your T2202 form from school).
• Transfer unused tuition credits to a parent or spouse (up to $5,000).
• Claim student loan interest (only for government-issued student loans).
• Check eligibility for the GST/HST rebate (file taxes to qualify).
• Use the Canada Training Credit (check CRA MyAccount for your balance).
• Deduct moving expenses (if you moved 40 km for school and later work there).
• Start a TFSA to save and invest tax-free.
• Open an RRSP (helpful), which you can do once you start working.
• Sign up for CRA MyAccount to track benefits and credits.

Check out this article: https://masteringpersonalfinances.com/master-your-money-financial-tips/