5 Ways to Get Money Just by Doing Your Dumb Taxes
You could be missing out on thousands of dollars just for being your sweet student self
Taxes. No wait, please don’t go! We totally get reading about taxes is as exciting as watching paint dry (actually slightly less). But you know what IS exciting? Free money. As a Canadian student, you’re eligible for a handful of tax breaks from the government that could put cheddar in your chinos just by checking off a few boxes. (Like, money…not cheese. That would be weird.)
We picked the brain of 26-year-old Omeed Asadi, a York University marketing grad who’s making the insanely confusing Canadian tax matrix a little easier to navigate with the free online benefits calculator he created called SherpaTax. It’s super helpful.
First things first: What the hell is a tax credit?
You pay taxes on pretty much everything you buy. A tax credit is a chunk of moolah you can subtract from the taxes you owe to the government each year. Investopedia breaks things down pretty well. Brain exploded yet? No? Great!
Here are five federal tax credits Asadi says all Canadian students should have on their radar:
1. Tuition Tax Credit:
This is the head honcho of student tax credits in Canada. If you’re over 16 and enrolled in a post-secondary school in Canada, you can claim this one to reduce your taxable income. If you’re not working or making any money at the moment, you can carry the amounts over to use in future years when you start bringing home the bacon. Or, if you’re feeling extra nice, you can transfer up to $5,000 to a parent, grandparent or spouse to give them a tax break instead of keeping it on your file.
Note: Canadian schools issue Form T2202A (you can usually access it online when you log into your student account). It identifies what kind of tuition fees you paid, and you’ll need it to file your return.
2. Education and Textbook Tax Credit:
The education part helps cover the general costs of being a student and you can claim a set amount for every month you were enrolled in a post-secondary program. This year, the education tax credit is $400 per month for full-time students and $120 per month for part-time students. Not too shabby! The textbook part helps cover the cost of those paper bricks you have to lug around. The monthly credit is $65 for full-time students and $20 for part-time students.
Heads up: The Liberals axed this credit in the 2016 budget and it will be discontinued after this year. Make sure you take advantage of this one while you still can.
3. Interest on Student Loan Tax Credit:
Got debt? Yeah, welcome to the club. Well, if you took out government-backed loans to pay for school, you can get a chunk of change back. You get 15 percent of the interest you pay on your loan, which can really add up. Think of all the sandwiches you’ll be able to buy. (BRB…grabbing a sandwich.)
The catch: Private loans and loans issued by foreign governments are not eligible. Womp. Womp. Womp.
4. Public Transit Tax Credit:
If you take the bus, train or subway every day congrats! You’re eligible for a tax credit. As long as the pass you’re using allows unlimited weekly, monthly or annual travel, you’re good. So make sure you keep your receipts or passes as proof in case the taxman comes a knockin.
Heads up: The feds just announced they’re scrapping this one as of July 1, 2017, so get it while it’s hot.
5. Moving Expenses Tax Credit:
If you’ve moved more than 40 km away from home to go to school – in Canada or abroad – you might be able to get some money back for things like airfare and moving costs. There are a bunch of restrictions on this one. You have to be a full time student and be the recipient of a taxable scholarship or grant, or have employment income. Make sure you do some digging to see if you fit the bill.
Okay, but do I have to file a tax return even if I’m not working?
You totally should. All Canadians are eligible for a GST/HST credit, but you can’t claim it if you don’t file. Even if you don’t have to pay tax this year, the Canada Revenue Agency needs your returns as a record of the tuition and school fees you’ve been paying so you can use them against your income in the future. You know that saying “Don’t ask, don’t get?” With tax credits it’s, “Don’t file, don’t get.” So get!
You’ll be kicking yourself in a few years when you realize you could’ve done your taxes instead of watching another episode of Riverdale. Trust.