Some tax tips for students

taxesAs a student, filing taxes may be the last thing on your mind. You’re probably barely making enough money to live on, so you likely aren’t going to owe any money to the government. Filing your taxes may seem tedious, but that doesn’t mean it’s not important. Whether you’re a post-secondary or high school student, if you make an income you should be filing your taxes. I’ve listed four reasons why you should file your taxes each and every year:

If you owe the Canadian Government money.
If you make over $10,000, then you will be required to pay tax. If your employer doesn’t deduct this amount from your paycheque, then you will owe money to the government come April 30th (tax filing deadline). If you owe money and don’t pay up, then the government can take action against you to recover what is owed to them. The government can dip into your bank accounts, garnish your wages or put a levy on property you own.

If you are owed a refund.
Obviously, you should file your taxes if you are eligible for a refund. As a student, there are a ton of deductions you can claim when filing your taxes. These include, but are not limited to: transit passes, tuition credits, moving expenses and student loan interest deductions.

To gain RRSP deduction room.
If you earn an income and are a Canadian citizen, you can earn contribution room for your RRSP (up to 18% per year). Even if you aren’t able to make contributions to your RRSP, earning that room will make a huge difference once you are able to start contributing. If you are able to contribute to your RRSP and the deductions won’t benefit you because you don’t make enough money, then you are able to carry the contributions forward indefinitely. This allows you to save for your future and claim the tax deduction when it benefits you most.

To get a GST rebate.
If you are over the age of 19, you can apply to receive the GST rebate. The rebate is paid to lower-to-middle income Canadian citizens each quarter. It’s a nice little income boost!

While many students think that filing their taxes is of no benefit to them, there are actually many reasons you should file your taxes. Doing research to find out what tax credits are available to you can save you a lot in taxes and help you to plan for your future.

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