Blurb: Most Canadian students receive little or no revenue, so filing a tax return should be fairly simple, right? Wrong. The profile of the typical student is changing and like most tax issues, the related provisions are numerous are numerous and complex.
By Peter Diekmeyer o Bankrate.com
With the changing economy, education has become a never-ending process. The universities are filled with older students going back to do a second degree, part-timers, who want to add to their skill-sets and traditional students who live at home and whose only income comes from a summer job.
"We get all kinds," says Zeeshan Schahid, a third year accounting student, who recently organized The Concordia University Tax clinic, through which 15 volunteers provided other students low cost tax return preparation services. "While its true that most students don't have that many slips, the sheer variety of situations we see, means that there are few hard and fast rules."
Like all taxpayers, students are required to declare all of their taxable income. That includes traditional income from part-time and summer work as well as interest revenues.
Moving expenses, in cases where students move more than 40 kilometers to get closer to their place of study, are also deductible from scholarship income. These moving expenses can include travel costs, meals as well as lodging certain expenses during the trip and for a short period immediately after.
The legislation defines what constitutes tuition fees broadly beyond traditional academic fees. They also include library fees, mandatory computer services, the cost of books included in correspondence course fees, as well as supplementary fees such as athletic and health services fees.
If your employer pays your tuition fees, then these are considered a taxable benefit and will be added onto your T-4 slip.
Students who do not take advantage of tuition or education credits can carry forward any unused amounts to a later year.
To be eligible, the student loan must be issued under the Canada Student Loans Act or similar provincial legislation.
Going back to school?
If you are thinking about doing so, one excellent tax planning opportunity is to contribute the maximum amount to your RRSP each year while you are working. Then, when you return to school, you can withdraw the amounts at a far lower tax rate, and can use the money to fund your course fees and living expenses while you study.
For more information:
Scholarships, bursaries and financial assistance:
-- Posted April 19th, 2004
Peter Diekmeyer is the Montreal Gazette's management columnist. He can be reached at: firstname.lastname@example.org
|© 2004 Peter Diekmeyer Communications Inc.|