Pretty sure the ‘T’ in taxes stands for Terrifying!

Discussing taxes, Albert Einstein once said, “The hardest thing in the world to understand is income tax.”

Man looks like he has understood something, and then seems confused.

Yes, you read that right. Albert Einstein found taxes difficult to comprehend.

We know what you’re thinking—if Einstein, whose name is literally synonymous with genius, found taxes difficult, how do the rest of us have a chance?

Well, luckily for you, IGNITE’s here to help!

Three men standing at the door saying, "We're here to help."

Let’s begin with understanding what taxes are.

What are taxes?

Tax is the money levied on your income, property, and goods to pay for government services.

Why should you file taxes?

All students residing in Canada, including international students, are obliged to file their taxes. And while this might seem like a messy task to partake in—especially with exams around the corner, doing so will help you get refunds on several expenses you’ve made throughout the year.

Simpsons character saying, "Well, we could use the money."

And who doesn’t like saving a few extra bucks?!

So, sit tight as we help you determine what expenses you can claim while filing your taxes.

Tuition

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If you’re enrolled in a post-secondary education course, you are eligible to receive tax credit on the tuition paid.

If you don’t owe taxes due to lower income, you could transfer up to $5,000 in tuition credits to a parent, spouse, common-law partner, or grandparent to help reduce their taxes.

Also, students residing in Ontario can get tax credits on textbooks purchased too!

Student loan interests

An animated character wearing gold necklace and carrying expensive shopping bags. Text: Tax Return.

While you may have a long way to go in clearing your student debt, you can take a little bit of a load off by claiming your loan interests. You could claim credit on the interest charged on your student loans if you received it under:

  • the Canada Student Loans Act,
  • the Canada Student Financial Assistance Act,
  • the Apprentice Loans Act,
  • other similar provincial or territorial government laws.

All you need to do is take the annual statement reporting the interest amount on your loan from your lender and enter it on your tax return.

But keep in mind, interests on student loans from private institutes can’t be claimed.

Moving expenses

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Are you a full-time student who had to relocate more than 40km to attend post-secondary? Then you are likely to be eligible to claim credit on certain moving expenses. You can claim expenses like:

  • transportation and storage costs,
  • travel expenses,
  • temporary living expenses,
  • meal expenses,
  • cost of cancelling your lease,
  • incidental costs related to your move,
  • and cost to maintain your old home when vacant.

So, keep all your receipts safe to gain credit on your expenses.

Canada Training Credit (CTC)

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The Canada Training Credit (CTC) allows individuals who were previously employed full-time and are currently training to develop their occupational skills to claim credit on their tuition.

So, if you’re a student aged between 26 to 65-years-old, who has resided in Canada throughout 2020 and have a Canada training credit limit (CTCL) for 2020 on your latest notice of assessment or reassessment for 2019, you are eligible for claiming tax credits.

Some other deductions you can avail that are not limited to students are:

Medical expenses

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If you had to pay for healthcare expenses in the past year, you may be able to claim them as eligible medical expenses on your income tax and benefit return. This also includes medical expenses paid by you for treatment of people dependent on you.

Just keep all your medical documents and receipts in hand and you can claim expenses on:

  • medical supplies,
  • dental care,
  • and travel expenses.

Canada employment amount

Woman typing on her computer's keyboard.

Being employed comes with its own share of expenditures. You’ve got to pay for tools like a home computer, uniform, and other supplies you might need in your workplace.

Under the Canada employment amount, you can claim tax credits on such work-related expenses.

Self-employed individuals, though, are not eligible to receive these benefits.

Are you still feeling overwhelmed? We understand, taxes can be confusing (high time they begin teaching this in school!).

But don’t worry, because IGNITE’s Tax Clinic’s here for the rescue!

Our team of CRA-trained accounting student volunteers will help you sort through all those confusing documents and file your taxes for you. The clinic’s free and virtual services are available to all Humber and Guelph-Humber students—so you can file your taxes from the comfort of your home!

The Tax Clinic runs from Tuesday, March 1 to Thursday, April 28, 2022.

So, sit back, relax, and let IGNITE do the work for you!

Want to improve your financial literacy? Here are 8 common financial terms every student should know.

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