A lot of students don’t see the point in filing their taxes while they are in school. They don’t make enough money to owe the government any money so they figure they don’t need to file their taxes.
But they are missing out!
When you are a student, taxes are your best friend. Seriously. As a student, you may not make enough money with your student job to owe the government any money. But if you paid taxes on each of your pay cheques, you may get a refund when you file your taxes and it could help your future tax returns too.
Just by filing your taxes, you could get all of this (and more):
- Education tax credit
- Textbook credit
- GST/HST credit
- Extra RRSP contribution room
Still not convinced? Here's three good reasons to file your taxes as a student:
1. It pays to be a student (literally)
Any student, over the age of 16, who is enrolled at an accredited post-secondary school in Canada can claim a tuition and textbook tax credit. A tax credit reduces the amount of tax you owe the government. If you don’t owe the government any money this year, you can hold onto it until you do.
Just how much is a tuition tax credit worth?
Full time student ‑ $400/ month
Part-time student ‑ $120/ month
Full time student ‑ $65/ month
Part-time student ‑ $20 month
2. The government will just give you money every couple months
It can be hard to buy things when you are a student because you don’t have any money. That’s why the government created a GST/HST credit program to help low- and modest-income Canadians handle the cost of taxes on all the stuff you buy. But you only way you qualify for this credit if you file your tax return! So get on it because if you do qualify, the government will send you a cheque in the mail or a directly deposit the credit into your bank account four times a year! How sweet is that?
3. You can help your future self save for retirement
File taxes now = refund now + RRSP room for future
Okay, so this one will seem like a bit of a stretch because retirement is super far away. But if you start filing your taxes now, you can make it easier for yourself to save a larger amount for your retirement. That’s because when you file your taxes, you build up what’s called “RRSP contribution room”. Every year you file your taxes, the more ‘room’ you have to save for your retirement. So when you are done school and can start saving for your retirement – you now have somewhere to save it.
Managing your money and taxes can be complicated, especially when you’re in school. That’s why we have experts to help you figure it out on TD Helps. Just ask them your questions and they’d be happy to help.