Textbooks, moving can save you cash
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Here are some tax tips to help students save or even earn money on their taxes.
Currently, the first $3,000 of scholarship, fellowship or bursary income received by a taxpayer in a taxation year with respect to post-secondary education or occupational training is not included in income. For 2006 and subsequent years, this income will be totally exempt from tax.
If students have any unclaimed education and tuition fee credits, they can carry them forward to reduce their taxes in the future when their income is higher. They have five years to claim tax credits for student loan interest, but they can claim education and tuition fee credits indefinitely.
See if you apply and qualify for GST rebates, tuition credits, education credits or the student-loan interest credit.
RRSP contribution room:
Students should always file a tax return because it will generate Registered Retirement Savings Plan (RRSP) contribution room down the road.
Students who move to attend full-time post-secondary school may claim costs associated with moving. Whether studying in Canada or outside the country, students can deduct moving expenses, but only against income from scholarships, fellowships, bursaries and research or similar grants or from part-time jobs they hold while going to school.
The federal government is offering a non-refundable tax credit to help pay the cost of public transit passes that are of monthly or longer duration. Students should claim the refund for any monthly passes issued for months beginning July 1, 2006.
The federal government has introduced a non-refundable tax credit to assist with the cost of textbooks for post-secondary students. The textbook tax credit will be calculated based on $65 for each month the student qualifies for the full-time education tax credit and $20 for each month the student qualifies for the part-time education tax credit. Transfer unused amounts to a spouse or common-law partner, parent or grandparent, or forward to a future year.