Saving for school? Splurge on a fancy dinner, it will help finance your education — sort of. Students are eligible for a slew of tax credits, many of which they know nothing about.
Amanda Leclerc will be starting her masters in research studies at the University of Toronto in the fall. Had she moved more than 40 kilometres for her summer job, she would have been eligible to claim moving expenses, which include meals for 15 days. “A lot of students don’t realize things like that,” says Cleo Hamel, senior tax analyst for H&R Block.
“One of my biggest obstacles in terms of financing my education is learning about what tax credits and funding is out there,” admits 28-year-old Leclerc.
If she were still paying off a Canada Student Loan from her undergrad, she could get a tax credit on the interest. Provided she’s fastidious in keeping receipts, come September she would get a tax credit on her transit costs. By attending an accredited university, she would get a tax credit for the time she spends in class. As a full-time student, that’s $400 a month. If she was part time, it would be $120. Regardless of whether she buys a single book, she would be allotted $65 a month in textbook credits ($20 if she was part-time).
“When you consider all the different credits that are available, they could add up to quite a bit,” says Hamel.
Chances are, as a full-time student, Leclerc won’t be raking in the cash. So she won’t have much taxable income to use her credits on. But they’ll be waiting. “If you don’t need them, you can carry them forward into future years,” says Hamel.
If Leclerc does have time to take on a part-time job, Hamel recommends she file a tax return, even if her income is below the personal exemption amount.
“You’re allowed to earn up to $9,600 before you have to start paying tax,” says Hamel. “Working paycheque to paycheque, your employer won’t know whether you’re going to make more or less than the personal exemption, so they’re required to make payroll deductions. If you don’t file a tax return you won’t be able to get back the money that shouldn’t have been deducted to begin with.”
For a quick tutorial on Tax 101, Hamel recommends websites such as cra.gc.ca and hrblock.com. Both have information pertaining specifically to students.
“The big thing is making sure you’re informed,” she says.
Tax credits can add up
Saving for school? Splurge on a fancy dinner, it will help finance your education — sort of.