s it your first time filing your income tax as a student? Are you aware of all the things that come along with filing taxes? Do you know what deductions you can get with your eligible educational expenses? Well, these are some pertinent questions that you must know the answers to before you file your taxes. In this blog, we’ll explore the responses to these questions and share some important tips with you to make your tax filing process easier.
This year, you can start filing your 2022 tax and benefit return online starting February 20. The majority of Canadians have until April 30, 2023, to submit their return. Your return will be regarded as timely filed if it is received by the Canada Revenue Agency (CRA) or has a postmark of May 1 or earlier because April 30, 2023, falls on a Sunday.
You have until June 15, 2023, to submit your taxes on time if you, your spouse, or your common-law partner are self-employed. By submitting your return before the applicable date, you can keep receiving any benefits or credit payments to which you may be entitled without interruption.
You can make any payments you owe until April 30, 2023. If the CRA receives your payment on or before May 1, 2023, or if a Canadian financial institution processes it, your payment will be considered timely.
CRA also offers an online course to make individuals understand the process of filing taxes.
Students who meet the requirements can claim the tuition tax credit because tuition makes up a significant amount of their out-of-pocket costs. The cost of attending college or university is partially offset by this non-refundable tax credit, which lowers any taxes the student may owe. This means that the tuition tax credit will not result in a refund if the amount of your tuition exceeds the amount of taxes you owe. Instead, it will reduce or even completely eliminate your tax liability.
Colleges, universities, and other educational institutions issue the T2202 - Tuition and Enrolment Certificate, which attests that a student completed the necessary number of hours of the relevant coursework to be eligible for the tuition tax credit. You can use this certificate to claim your tuition tax credit.
You can learn more here about the amounts you might be eligible to seek deductions for or credit for education-related expenses. This includes relocation costs, interest paid on student loans, tuition, education, and textbook costs.
As a student, it’s important to know which earnings will be taxable. You must invest your money to be able to save some tax amount. The following sources of work are included in your taxable income:
Work-related Income: All compensation for work, be it sporadic, part-time, or regular, is regarded as employment income. This covers your pay as well as any tips you may have received. By the end of February, your company will often send you a T4 slip.
Education Savings Accounts, Registered (RESP): Interest from a Registered Education Savings Plan (RESP) is also considered earned income. A T4A showing the amount of interest you received will be sent by the RESP carrier.
Bursaries, Fellowships, Apprenticeships, and Scholarships: If you are not entitled to receive the entire sum under bursaries, fellowships, apprenticeships, or scholarships, a portion of this amount may be taxed as income. If a scholarship is tax-exempt, it is determined by taking into account the program's duration, the terms and circumstances of the scholarship, and the duration of the cash reward.
Scholarships, fellowships, and bursaries given for full-time study towards a diploma or degree are fully tax-exempt, with the exception of postdoctoral studies. Grants for apprenticeships are reported on your T4A slip and must be recorded as income.
As a student, you'll require the following tax slips the most:
T4 - Remuneration paid statement
T4A - Statement of pension, retirement, annuity, and other income
T4E - Employment insurance benefits statement
T2202 - Tuition and enrolment certificate
You can access these slips online through your CRA My Account.
The federal government works with various provincial governments to provide grants and loans to students in need. Citizens, permanent residents, and protected persons living in Canada may apply for student loans if they maintain the required course load. You may deduct the interest from your tax liability when you pay off your student loans. You can only deduct interest on student loans if you got the loan under:
If you merged your student loan with other debts, you cannot claim loans from other institutions or the interest you paid on those debts. This implies that you are not permitted to deduct interest paid on any other type of loan, including personal loans or credit lines.
Although the federal and provincial governments oversee the student loans that qualify for the tax credit, they are actually granted by conventional banks and other lending institutions. A yearly statement detailing the interest paid on your loan will be sent to you by your lender. This sum is reported on your tax return.
For a quicker return, sign up for direct deposit and file your taxes online. The CRA maintains a list of accredited tax software packages that are quick, safe, and easy to use, some of which are free of cost. You might have access to the following when filing using NETFILE-certified software:
If you are well aware of the terms related to taxes and understand the tax filing process, you can benefit from it. You can learn how to file your own taxes online or hire an accountant’s services.
A financial planner can also help you in planning your investments, managing your income, and planning your taxes in an organized way.
You can check out ABM College’s Financial Planner Diploma program to learn the basics of the finance industry.
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