Tax-filing season is upon us! Most Canadians have until midnight on Monday, May 2, 2022, to file their income tax and benefit return. As a student, you may have many questions about taxes and might be filing a return for the first time. Itâ€™s important to know that even if youâ€™re not making much money, filing can often lead to extra cash in the bank.
Why students should file their taxes
Did you know that most of the money you spend on tuition may be used to claim a tax credit? The credit is non-refundable, meaning it will reduce your federal tax up to the amount of tax owing. You can also carry it forward to after university when youâ€™re making more and owe tax on your income.Â You can also transfer it to your family or partner to help them reduce their tax owing.
Another major reason to file your taxes is that there are benefit and credit payments you could receive if you file your return every year, even if your income is tax-exempt or you have no income earned in the year.
For example, you may be eligible to get a tax-free credit payment four times a year, known as the GST/HST credit. This payment is for people with low or modest incomes, and the best part is you do not have to apply for the credit. When you do your taxes, the Canada Revenue Agency (CRA) will determine your eligibility and let you know if you qualify.
Gather your documents
If you have a job, you will need to report this income and any other sources of income. That could include tips, scholarships, bursaries, study grants and payments from a registered education savings plan (RESP). If youâ€™re lucky enough to receive a gift of cash from your family or another benefactor, that money doesnâ€™t count as income.
Next, think of all your expenses and deductions. Did you move to go to school? If so, you can claim your moving expenses. Are you making payments on your student loan? You can claim part of the interest youâ€™ve paid.
Youâ€™ll also receive a form from your post-secondary institution that outlines the tuition paid to your school. With this, you can claim tuition to reduce your tax owing.
If you received benefits issued by the CRA in 2021, such as the Canada Recovery Benefit, you will need to report that income on your tax return. The CRA will mail you a T4A slip with the information you need by the end of FebruaryÂ 2022. T4A slips will also be provided online if youâ€™re registered for My Account.
Learn about your taxes
This year, the CRA has a new online learning tool called â€œLearn about your taxesâ€ to help inform students and empower them to do their taxes on their own. The free online learning tool provides you with lessons that help you understand what taxes are, why we pay them, how to read your pay stubs and income tax slips, and finally, how to do your taxes. Following each lesson, you can test yourself with exercises and quizzes.
How to file
There are a variety of certified software products to meet your needs, some of which are free.
Filing online is the quickest way to get your return. One last tip, if you have a modest income and simple tax situation, a volunteer through the Community Volunteer Income Tax Program can do your taxes for you â€” for free.
Find more information specific to your situation at canada.ca/taxes-students and canada.ca/taxes-get-ready.
Canada Revenue Agency (CRA) â€“Outreach ProgramÂ will be hosting an Outreach Information Session on March 1st, 2022 at 10:00 am to provide an overview of Canadaâ€™s tax system, benefits, credits and services for international students.
UPEI International Student Virtual Information Session
Students can register for this session online at: https://canada.webex.com/canada/onstage/g.php?PRID=9aff4a7ca9028e174ca64a4b2f13ac2b
Once you have registered you will receive a generated invitation allowing you to log in to the session on March 1st at 10:00 am.
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