The deadline to submit your taxes is fast approaching. April 30th, 2024 is the last day to file your taxes for earnings in 2023, but what does the deadline mean? Let’s take a look at this important distinction along with other questions to help get you through your tax season with ease.
What does the deadline mean?
Submitting your taxes before the deadline isn’t just good practice, but can save you money as well. If you need to pay taxes owed, after the deadline, there can be late filing fees and you will start to accumulate interest on the amount owed. However, if you do not need to pay taxes or are getting a refund, not filing on time will, of course, delay any money you can claim, but also remove any credits you may be entitled to, such as GST, Climate Action Tax Credit and so on. Most people start receiving these credits after their first time filing their taxes but do not know they can be put on hold if they do not file by the next deadline.
Now let’s get started by figuring out what you need to file taxes with peace of mind.
How much tax do students pay in Canada?
The answer to each following question will be preceded by the phrase, “It depends”. No one answer covers every single person and their situation when it comes to calculating tax. That being said, some patterns and tips can help you understand what to prepare for in the current tax season.
Canada has what’s called a “progressive income tax system”, meaning individuals earning more are subjected to paying a higher tax percentage. Taxes are bound to change each time you file based on whether you worked, how much income you made, and what tax credits you are eligible for. All of these factors will give you a rough idea of the tax bracket or “individual tax rates”. Most students will be below the first bracket in the federal taxable income threshold on average, which means around 15% is what to expect to pay in taxes.
However, there is also a federal basic personal amount, which is the amount of money you can earn up to before having to pay tax. This number increases every year and is currently sitting at around $15,000. This does not mean you don’t have to pay taxes on your income, but instead, if there are no outstanding debts, you should expect most of what you paid into taxes as a return during tax season.
What materials do you need?
One of the most important pieces of advice that tax brokers can give is to keep all documents about taxes in one place for ease of access. Tax season doesn’t have to be hard or take up a lot of time; if all of your documents are accessible, doing taxes yourself or going to a tax consultant can be a smooth process. But what documents are we talking about?
Around the end of February/beginning of March, any workplace you were employed at in the previous year will deliver to you a T4 (Statement of Remuneration Paid) slip. **Make sure your address is up to date even from previous employers so they know where to send the slips if the company chooses to mail instead of electronically file.
Along with a T4, students should expect to receive a T2202a (Education income tax receipt) from their educational institution. This displays the amount of eligible tuition per semester paid for the current tax year. Find out how to find your T2202a from Memorial University.
Lastly, keep all receipts from moving expenses, childcare costs, work-related expenses, and student loans paid in, if interest is being paid in. After all documents are gathered, check your eligibility for claims, or prepare the forms to bring to a tax consultant to help you assess claims.
General student claims
Now that we are almost ready to file, what kind of claims should students be looking out for? As mentioned, this can vary drastically depending on your lifestyle. However, common claims include moving expenses, Canada child benefit (CCB), and non-refundable reductions for T2202a receipts. Each claim has different requirements to claim.
For example, to claim moving expenses, the requirements include:
- You’re a full-time post-secondary student.
- Your new place of residence is the place you usually reside throughout the year.
- The new place of residence is at least 40 kilometres closer to the educational institution.
T2202a receipts can be carried over for future tax filing. This means you can delay claiming credits earned from filing a tuition receipt until you need to pay taxes. If done this way, you may be able to claim a T2202a as a “non-refundable” credit. This means it will go against the amount you owe in taxes, but cannot be used to get a tax refund. Instead, the amount owed could decrease to $0, but it cannot surpass that to earn any credits.
For further information regarding claims, please see HERE.
International student tax information and foreign income
If you work in Canada and earn income during your time as an international student, the first time you file you will be considered a “newcomer to Canada”. Each following year, for tax-related purposes, you will file as a temporary resident of Canada. Your residency status for income tax purposes is different from your immigration status. If you have questions, please check determining your residency status on the Government of Canada website.
It is very important to also keep track of any foreign income earned outside of Canada if filing taxes in Canada. This can apply to Canadian residents who work in a different country with a work visa. Taxes are done differently in each country, so make sure to keep track of any income slips or amount of taxes paid elsewhere, as you can file it when you do taxes in Canada. As well, make sure to assess how taxes work in other countries to double-check where and how to do your taxes.
Final notes and places to file
This is in no way a comprehensive list of all the possibilities when filing your taxes. If you find yourself with materials not covered in this guide or have general questions, find a tax broker to help you file, or use online resources such as TurboTax Canada or canada.ca/taxes-help.
Make sure to check in to MUN’s Tax-Help Super Clinic for information sessions and free tax advice dates. You can also find a list of available tax clinics around St. John’s HERE.