Taxation, students who forget to file their income tax are not uncommon. Having earned less money than the taxable minimum, they often find it unnecessary to lend themselves to the exercise. However, they would have an interest in making their declaration.
For the students
“Students who fail to file their income tax return are depriving themselves of interesting tax savings from which they themselves, or their parents could have benefited,” says tax expert Danièle Boucher. If the provincial tax credit is not very generous, the federal one is more, she explains. By adding up all the credits for which he is eligible, the student can make tax savings of more than $ 1,000.
But what good is it to get tax savings if there is none to pay? In fact, no tax is payable if the annual income is $ 11,327 or less. As the credits for tuition fees are not refundable, they cannot be paid to the student if he does not pay tax. For many, these credits therefore seem to have no value.
However, be aware that these credits are transferable immediately to a parent or can be carried over for later use by the student. “However, I recommend transferring these credits to parents immediately, because the amount of the eligible credit does not grow over time,” argues Ms. Boucher. As transferable credits can amount to several hundred dollars, you might as well take advantage of them right away to reduce the family tax payable. The use for the tax return calculator is important there.
“Getting into the habit of filing your tax return as early as possible is certainly beneficial in becoming familiar with all tax laws and all possible provisions.” – Danièle Boucher, tax specialist
Thinking about the future
Some students still decide to postpone these credits. But beware of unpleasant surprises! “To be entitled to it, a tax report must have been issued for the year in question”, specifies the tax specialist. No income tax return filed while studying, no transferable tuition credit. In return, the GST / HST credit and solidarity tax credit are paid even to those who do not pay tax.
- While it is often said that it is better to save for retirement as early as possible in your professional life, it can sometimes be advantageous not to contribute immediately and thus postpone the tax deduction. These contribution rights accumulate from year to year without having an expiry date.
Last Words
In any case, getting into the habit of filing your tax return as soon as possible is surely something beneficial to familiarize yourself with all the tax laws and possible provisions”, adds Ms. Boucher, who admits to finding everything much more complex than it should be. Especially since the various provisions often change from year to year. By invariably filing a tax return, we make sure to keep abreast of the credits and the laws in force so as not to miss anything and avoid unpleasant surprises.