Tax season has begun and many students are wondering whether they should file their taxes. If it is not absolutely necessary in certain cases, experts recommend doing it regardless of the situation.
First, keep in mind that many post-secondary students are eligible for a tuition tax credit. “This non-refundable tax credit will likely cover all of your debt or even help you get a tax refund,” TurboImpôt said on its website.
If you don't owe taxes, you can also transfer the credit to a loved one or even roll it over to another year.
In addition to claiming various tax breaks, simply filing a tax return can also help you get money back.
Deduct expenses to save taxes
“Another way to pay less taxes is to deduct certain expenses. While the credit reduces your taxes payable, the deduction reduces your taxable income,” the National Bank of Canada website says.
According to the Canada Revenue Agency, moving expenses and childcare expenses are the most common deductions.
What happens if the government collects too much tax on an employee's wages during the year? The answer is simple: a refund will be made.
“Any time the CRA collects more income tax than you owe, you will receive the excess amount as a refund. You have to think of this as money you didn't know you had, just like the $20 bill you found in the pocket of your winter coat last year! is explained on the TurboTax website.
The same applies to Revenu Québec.
RRP and GST
Finally, the sooner a student begins filing his or her taxes, the sooner he or she will be eligible to contribute to a registered retirement plan.
“If this is not always one of the priorities at the beginning of life, these contribution rights will be very useful in the event of a salary increase after receiving your diploma,” says TurboImpôt.
Another bonus: Once you reach 19 years of age, a person can claim the Goods and Services Tax (GST) or Harmonized Sales Tax credit.