Students can Save Thousdands in Taxes - Finance Fox

As a student I fully took advantage of every tax benefit available to me and thanks to a great accountant who made sure I got a max refund in return. Truthfully I loved filing? taxes as a student, because I was guaranteed a good check in return. A combination of savings, a hefty tax return and a little help from my parents ensured I did not borrow much for schooling, aside from my first-year in university, but that?s a whole other story for another time. Government of Canada offers a lot of tax breaks for students, giving everyone a fair opportunity to get an education. One of my favorites was the ability as a student to carry forward unused credits, from one year to the next. Furthermore, any unused credits can be used even when you land your first job against the income you earned. Pretty sweet deal I think, but there are even more basic tax deductions for students, below is a list of some of them.

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Tuition Tax Credits

As a full-time student, you can claim upwards of $400 for every month you are enrolled in school and part-time students can claim up to $120 for each month they are enrolled in school. The educational institution will issue a T2202 or T2202A form, which is essentially proof of enrollment in the school. If for some odd reason they don?t offer this up, make sure to ask for or you might be SOL. Another beauty of tuition tax credits, is the ability to transfer them to parents or grandparents. My self and my brother both did this, in order to help our parents offset their income and give them a tax break. You can transfer up to an amount of $5,000. The untransformed amount or if no amount was transferred, can be carried forward as a tax credit to use in next year?s tax season. The beauty of this was, that we all got hefty returns.

Textbook Expense

Full-time students can claim up to $65 per month for textbooks, while part-time students can claim $20 for each month they are enrolled in school. It does not seem like a lot, considering the average cost of a text book is well over $100, but it all adds up in the end. Trust me. Schedule 11 should be attached to the? tax return to claim this.

Withholding Tax

Most students earn a part-time income, but since this income is so small each year while in school it is typically not taxable. The student should ensure through their employer that no withholding tax is deducted from any income they earn.Most students should be able to earn upward of $16,000 (not sure if this number has changed)? before they become taxable, thanks to the basic personal and other tax credits available.

Tax-Free Scholarships

In 2006 the government introduced no taxes to be paid on fellowships or bursaries. Previously, students would have to record this as income to be taxed during their tax return, but not anymore! Thanks to the Federal Government. I wish they had this when I went to school, but at least one member (my brother) is getting the benefit of this as he does not have to pay for his $1,000 scholarship per semester. Lucky bugger!

Moving Expenses

Students can claim certain moving expenses if the move to school, or home again, is at least 40 kilometres. The deduction will be limited to the income earned in the new location, which can include taxable research grants and employment So that being said, a part-time job while at school may be a good idea to enable this deduction.

Transit & Other Costs

Students who drove to school (like my self) can claim the expense of per-semester parking pass. As we all know, parking at post-secondary institutions is a total money grab for the school, which can sometimes run up to $700+ per semester. For those of you who take public transit to school, make sure to save every receipt from tokens and tickets purchased to travel to and from your educational institution.

Readers; As a student, did you or do you fully take advantage of available tax credits?

Eddie

Source: http://www.financefox.ca/index.php/students-save-taxes/

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