The month of April is known for two things: rain and income tax returns. While showers “bring May flowers,” tax season brings puzzled students.
“A lot of times students find filing taxes pretty confusing,” said CSU VP communications Elie Chivi.
There’s a long list of documents students should hang on to and submit with their tax claims, including bus passes, work slips and school tuition receipts from the previous year.
Many students leave the task up to someone else. “I don’t know [how to file],” said Concordia undergraduate student Samantha Devlin. “My parents just ask me for all my papers.”
Many students don’t know they can actually receive a part of their tuition back from the government by simply claiming it. Submitting a tuition tax receipt when you file your taxes could mean a bigger tax return.
Students should claim most of the income they earn, according to the Canada Revenue Agency (CRA). Non-taxable incomes, such as GST/HST credit, Canada Child Tax Benefit payments and lottery winnings don’t need to be claimed.
Income tax returns can sometimes seem overwhelming to the inexperienced because of the unfamiliar words. For a student filing their taxes, T4, T4A and T5 are three of the terms that will pop up the most frequently.
The T4 slip is where employment income and deductions made during an entire year are indicated. The T4A slip indicates school-related payments, and the T5 slip shows money that was put towards savings. All three of these forms should be submitted in a tax return.
There is a significant amount of expenses that could help bring in a bigger return; charitable donations, childcare expenses, interest paid on student loans, automobile expenses and dental work are just a few.
CIBC’s managing director Jamie Golombek recently warned Canadians to not get stuck in any tax-filing routine. “There are changes to the tax rules each year,” he said. “This makes it important to double-check what new savings opportunities you may be eligible for.” Being sure every expense has been claimed will ensure the biggest possible return, he said.
The one constant in taxes is the deadline; every year, taxes have to be filed on or by April 30.
The CSU provides students with income tax help through the services section on their website. “Many students use the Ufile service that we operate in conjunction with the Canadian Federation of Students,” said Chivi. “A large number of students, especially international students, don’t know they can get a lot of money back from the government,” Chivi said.
Unfortunately, after all the number crunching and being sure every expense has been submitted, some tax-payers get hit with a surprise when the government audits their file. Some Canadians end up owing the government money at the end of the year. This can happen when a raise at work puts the employee in a different tax bracket or if some gains on investments weren’t claimed.
When money is owed to the government, it has to be paid by April 30. If the deadline is missed, a five per cent penalty will be added to the amount with one per cent interest being added each month.
For answers to all questions about income tax claims, visit the CRA online at www.craarc.gc.ca/tx/ndvdls/sgmnts/stdnts/menu-eng.html.