If you’re a student, don’t fork out any more dough than you have to.
The most powerful student tax credit is for tuition. All students receive a T2202A form stating the amount of tuition paid in a year. Schools will either mail it to you or make it available through a secure online website. Without this form, you can’t claim tuition and other valuable education credits like the Textbook Tax Credit. Scholarships or bursaries are tax free if your program qualifies.
Tuition and education credits must first be applied to your tax return to reduce tax payable to zero before transferring anything in excess to a parent, grandparent or spouse. You can transfer up to $5,000 per year in credits. Anything extra is carried forward and cannot be transferred.
Full time students benefit from a Textbook Tax Credit of up to $65 per month and $20 per month for part-time students. Sadly this credit is not linked to the number or cost of textbooks purchased, which can cost thousands annually.
If you take public transit to campus, you can claim the Transit Tax Credit. But, ensure you keep your passes and receipts so that you can back up your claim. If you move more than 40 kilometres for a summer job, you can claim moving expenses against your employment income. Deductible expenses include travel, transportation, storage and the cost of meals and temporary accommodation. Even if you have zero income, you should file a 2010 tax return which allows you to collect the GST/HST credit.
Once you’ve completed school, those dreaded student loans also have tax advantages. The interest on federal and provincial student loans is deductible. But, loans or credit lines outside of the government student loan programs are not deductible
You can hire an accountant or tax expert to help prepare your return. Or, take advantage of free or low-cost on-campus tax services. As part of course training, many accounting students are given the opportunity to prepare tax returns under the supervision of a professor for other students on campus.
Visit the Service Canada website for more information www.servicecanada.gc.ca.