As the
kids head back to college or university in a couple of weeks, why not share
some tips with them so they can be sure they are taking full advantage of the
tax system to maximize the amount of cash in their jeans.
Here are five top tax tips for students:
1 Maximize your non-refundable tax credits.
If you earn income during the year, perhaps from a part-time or summer job, then the various non-refundable credits available to you as a student should come in handy to reduce your federal, or in some cases, provincial taxes payable.
The most common credits for students include: tuition, education, and textbook credits, a credit for the cost of monthly public transit passes, a credit for interest paid on certain student loans and the relatively new Canada employment amount.
2 Your scholarship is tax-free!
The tax rules changed back in 2006 to exempt the full amount of any scholarships, fellowships, bursaries, study grants and artists' project grants received by students from tax; provided the program you are enrolled in entitles you to the education credit.
3 Report only the EAP portion of RESP withdrawals.
Only the educational assistance payments (EAPs) from your Registered Education Savings Plans are taxable. EAPs consist of the income, growth, or Canada Education Savings Grants (CESGs) paid out to you from your RESP. Any contributions refunded to you are tax-free.
4 Claim moving expenses.
If you moved back home from school during the summer months to earn employment income, you can deduct your moving costs against your summer employment earnings provided your move was more than 40 kilometres.
5 Consider a TFSA for extra cash.
Saved some extra cash from working during those summer months? Why not sock up to $31,000 into a new Tax Free Savings Account (TFSA). The money grows tax- free and you can access your funds whenever you want, for any reason. Plus, any amounts you do withdraw can be re-contributed, beginning the following year.
Educating our kids early by helping them keep more of their hard earned cash in hand; will hopefully instill the importance of tax planning; because none of us like to pay more than our fair share.
Here are five top tax tips for students:
1 Maximize your non-refundable tax credits.
If you earn income during the year, perhaps from a part-time or summer job, then the various non-refundable credits available to you as a student should come in handy to reduce your federal, or in some cases, provincial taxes payable.
The most common credits for students include: tuition, education, and textbook credits, a credit for the cost of monthly public transit passes, a credit for interest paid on certain student loans and the relatively new Canada employment amount.
2 Your scholarship is tax-free!
The tax rules changed back in 2006 to exempt the full amount of any scholarships, fellowships, bursaries, study grants and artists' project grants received by students from tax; provided the program you are enrolled in entitles you to the education credit.
3 Report only the EAP portion of RESP withdrawals.
Only the educational assistance payments (EAPs) from your Registered Education Savings Plans are taxable. EAPs consist of the income, growth, or Canada Education Savings Grants (CESGs) paid out to you from your RESP. Any contributions refunded to you are tax-free.
4 Claim moving expenses.
If you moved back home from school during the summer months to earn employment income, you can deduct your moving costs against your summer employment earnings provided your move was more than 40 kilometres.
5 Consider a TFSA for extra cash.
Saved some extra cash from working during those summer months? Why not sock up to $31,000 into a new Tax Free Savings Account (TFSA). The money grows tax- free and you can access your funds whenever you want, for any reason. Plus, any amounts you do withdraw can be re-contributed, beginning the following year.
Educating our kids early by helping them keep more of their hard earned cash in hand; will hopefully instill the importance of tax planning; because none of us like to pay more than our fair share.
Have a
great weekend,
Tracey
Source:
Original article written by Jamie Golombek, welcometojamiegolombek.com,
originally posted on The Money Tree 08-2012
No comments:
Post a Comment