Taxes 2007: save yourself some money

Chelse McKee, staff

As the new year commences, the annual chore of completing and filing income taxes begins. For students, especially new filers, this can be a dire task peppered with missed deductions and missed moneys.

To begin filing for taxes, all post-secondary students must have their T2202A forms, because without it, students will not be allowed to claim their tuition and education amount, which will earn a tax credit between $120-$400, depending on the number of courses taken. Each student’s T2202A is accessible in Aurora.

Claiming tuition and education credit are some of the most common deductions that students miss when they file, according to Carol Sulyma, a tax specialist with H&R Block.

“Most important . . . is students just not reporting tuition as an expense. If you went to school for eight months in 2007 and you’re going full time . . . they would have an additional credit of $3,200. They’re missing this by not reporting the tuition.”

Before 2006, any bursary, scholarship, or financial awards would be unable to be claimed up to $3,000, which is because the financial reward was considered part of the student’s income. In 2006, however, that law was changed so that all financial rewards for a student can be considered claimable.

Accumulating the previous and current tuition into one tax return, Sulyma claims, is another major issue “especially with first-year students.” One example is a student attempting to put their 2007 tuition payment as a deduction for their 2006 tax return. The tuition is determined taxable by the year you use it, not by the year you pay for your tuition.

“In August, you pay for the whole term till the end of April, while you can claim just the September to December portion, only the portion that applies to the tax year,” Sulyma says.

Students (and low-income individuals) renting a room or apartment are also eligible for a rental credit. This credit can only be claimed by one person per residence, so roommates have to agree on a claimant, who can then divide up the returns.

“If I have a student that’s living with a couple other people, I’ll talk to them about who would have the lower income because it’s always the better credit,” Sulyma said.

Claimants who are eligible for zero taxes — or even a rebate — can transfer tax credits to another person, or to the next tax year, Sulyma said.

For students wondering how many, if any, tax credits they received, Sulyma said that holding on to the notice of assessment — the sheet with your total — is important. The notice is completed and sent back to the filer after the tax return has been reexamined and assessed for accuracy.

Some additional credits for students include the transit pass credit, which requires holding on to old bus passes and receipts, as well as the textbook credit, which offers the tax beneficiary $20-$65 a month depending on part- or full-time status but regardless of how many textbooks the student purchases.

Ultimately, Sulyma says, that confidence in the return is the most critical element for a student to remember.

“The most important thing is to remember to include everything, double-check it. If you’re not sure get somebody to check it for you and again, the tuition is of the utmost importance whether you use the credit or not.”

Tax returns are due April 30.

Tax tips for students

• Rent credit only goes to one recipient per household
• Claim your scholarships and bursaries
• Save all bus passes and receipts
• Tax credits can be transferred to other tax returns
• Get credit for textbooks, no matter how many you buy
• Only claim what you use, not what you pay
• Double-check your work