Back to School Tax Tips 2017Brian Jang ON August 17, 2017
As the summer is winding down, students everywhere are gearing up for another school year. And for those of you heading back to college or university, this is also the time when financial stress can kick into overdrive. With the ever-increasing price tag of a post-secondary education, here are some tax tips for students to help ease the burden.
Back to School Tax Claims
Have you already paid your tuition?
Good news if you’ve already shelled out for your tuition. According to the Canada Revenue Agency (CRA), paying your post-secondary costs upfront will allow you to claim your tuition fees. Tuition fee amounts paid in excess of $100 are tax deductible, and your institution will issue you a 2202A tax slip in January or February of the following year. This tax slip can be claimed when you file your personal tax return.
Unfortunately, the other major cost of attending – textbooks are no longer deductible. The Federal education and textbook tax credits were eliminated for all tax years after 2016.
Will you have to move to attend school?
Another great tax tip for college students is the ability to write off moving expenses. There is a small catch here though. You have move at least 40 km closer to your school from where you currently live. If you meet this criterion, you can claim a ton of handy expenses, like transportation fees, storage costs, replacing your driver’s license, the cost of utility hookup and disconnections, and more. Be advised, these types of moving expenses are highly reviewed by the CRA. Keep all your receipts for the completion of form T1-M on your personal tax return.
Do you have to take public transit to get to school?
There is no doubt about it, public transit fees can take a big chunk out of your finances. If you want to qualify for the Public Transit Pass Tax Credit, you must purchase the monthly passes. Daily fares and top ups are not tax deductible. Also, the Federal 2017 Budget eliminated this tax credit effective July 1, 2017. So, public transit passes are only deductible for January to June 2017.
Are you paying interest on a student loan?
Did you know you can get a tax credit for the accumulated interest on your student loan? As long as you received a student loan under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or similar provincial or territorial government legislation, you can claim your student loan interest.
Back to School Tax Credit
Claiming the actual tuition fees
When it comes time to file your personal tax return, the tuition fees must be claimed on your own personal tax return first. If you are not able to use them fully, you then have choice. a). up to $5,000 can then they can be transferred to a spouse or parent for them to use on their tax return or b). it can be carried forward to future years when you can use them.
Paying for a post-secondary education can be expensive and stressful for both students and parents alike. Hopefully, these back to school tax tips will help you save on the cost of college or university.
For the most up-to-date back to school tax saving advice, contact us today!